ETH trades at a massive confluence of resistance zone indicating we're likely to see a big trend decision in this soon.
In this area we have the completion of a possible bearish head and shoulders, bearish crab and this is also a long term resistance from the fib extensions of the last major pullback.
The head and shoulders and crab are both patterns which can lead to strong reversals and are also both patterns that lend themselves to strong bullish continuation if they fail.
Head and shoulders patterns fail 2/3 times and most of the time these result in a big bullish breakout move.
One of the tricks of the head and shoulders is there's commonly a false head and shoulder first. In the bigger picture this ends up being the left shoulder.
When this happens we usually see a butterfly marking the head. This happened in the top of the 2021 rally.
Which gives more weight to the head and shoulders as a reversal pattern here. But still implies really strong up move if it fails.
This confluence of resistances is important because a rejection off of these may be telling us there's been a change in the weekly trend.
If the crypto macro uptrend broke in 2022 (See below post for further discussion on this), then the failure of the current big chart rallies would be the first major sign of this switch.
What happens here may prove to be critical to the big trend in ETH for the foreseeable future.
If it's going to be the bear rejection, a really strong non-subtle move would be due.
It's common, though not essential, for strong rejection style moves to be news related.
Very optimistic outlook for ETH if it can break higher annulling the confluence of reversal patterns but if the reversal comes it may be the start of something that's going to go on a lot longer.
A lot of people are strongly under the impression crypto is a free lunch now. So long as you're willing to hold nothing too bad can happen.
If the weekly trend reversal patterns end up working, I think this is going to be proven wrong.
In this area we have the completion of a possible bearish head and shoulders, bearish crab and this is also a long term resistance from the fib extensions of the last major pullback.
The head and shoulders and crab are both patterns which can lead to strong reversals and are also both patterns that lend themselves to strong bullish continuation if they fail.
Head and shoulders patterns fail 2/3 times and most of the time these result in a big bullish breakout move.
One of the tricks of the head and shoulders is there's commonly a false head and shoulder first. In the bigger picture this ends up being the left shoulder.
When this happens we usually see a butterfly marking the head. This happened in the top of the 2021 rally.
Which gives more weight to the head and shoulders as a reversal pattern here. But still implies really strong up move if it fails.
This confluence of resistances is important because a rejection off of these may be telling us there's been a change in the weekly trend.
If the crypto macro uptrend broke in 2022 (See below post for further discussion on this), then the failure of the current big chart rallies would be the first major sign of this switch.
What happens here may prove to be critical to the big trend in ETH for the foreseeable future.
If it's going to be the bear rejection, a really strong non-subtle move would be due.
It's common, though not essential, for strong rejection style moves to be news related.
Very optimistic outlook for ETH if it can break higher annulling the confluence of reversal patterns but if the reversal comes it may be the start of something that's going to go on a lot longer.
A lot of people are strongly under the impression crypto is a free lunch now. So long as you're willing to hold nothing too bad can happen.
If the weekly trend reversal patterns end up working, I think this is going to be proven wrong.
Comment:
Initial selling out of the confluence of resistance.
Comment:
Lot of selling now.