ETH closed this week with a candle that signals rather a continued consolidation than a reversal. Such multi-week consolidation makes me think of a triangle. Let’s explore the hypothesis.
The July’s candle shifted the odds back to the bulls. A Piercing Line / Hanging Man type of candle is a very good outcome after the terribly bearish interim candle in the middle of July. These types of candles require confirmation.
ETH seems to be on track to close above $2890 and confirm a continued rally. If it suddenly drops below $2890, this would be very bearish.
After the Three White Soldiers in previous weeks, another 3 weeks were spent resting. This is a classical formation and if ETH likes classic movements, it should resume the rally next week.
So far, no technical indicator suggests an immediate reversal. The price is still well above 8 EMA line.
The prolonged pause and the narrowing range also signal a possible triangle being developed. I’ll discuss it in the EW section.
Today’s daily candle is a second consolidation candle after a Bullish Engulfing on Thursday. This is normal and we could possibly see one or more of them before the rally resumes.
There are two critical levels to watch for – I’ll specify them in the summary.
The price is above the 8 EMA line. RSI has been reset in this consolidation. Other indicators support the rally.
In the following Premium Content section I discuss the Elliott Waves perspective, the channel, immediate targets and their timing, and the critical levels to watch for.
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