Chartpunk Ethereum Brief #2
Ethereum is the mostly used smart contract platform out there, utilizing its decentralized, open source blockchain. The project has launched in 2015 and is today the second biggest platform by market capitalization. In this brief I will provide you with periodic technical analysis updates on Ether, the native cryptocurrency of the Ethereum blockchain.
HTF Market Structure
Ethereum is trending upwards in an ascending channel since July. The bottom tendline of the channel has been successfully retested in the previous days as support, and the price is currently still very close to the support level. The Stochastic RSI has started to trend up from oversold territory but still has a relatively low value on the daily chart. The price is above the key AVWAP support levels of 4000 and 3300. There is an AVWAP resistance at 4400 which needs to be taken out by the bulls to enable further moves to the upside.
LTF Market Structure
The low time frame Ethereum chart is controlled by the bears. The price has just bounced down from the AVWAP level at 4400, and the 4250 AVWAP level is also a reasonable support of the bears. These levels could by nice entries for short players, but as we are relatively close to HTF support zone, I would exercise caution in when playing with shorts.
Ethereum is in a nice and intact long term uptrend, but in the low term bears are in control of the prices. Key resistance of the bulls is the 4250–4400 zone and their key support is the 3850–4000 zone.
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What is trend trading?
Trend trading is a market strategy that is reasonably different from swing trading or day-trading. A market “trend” is a tendency of a financial market price to move in a particular direction over time. Swing traders and day-traders are usually trying to pinpoint low-term market tops and bottoms, and take aggressive positions expecting to profit from a swift change of market direction. Trend traders are looking for consolidated and strong directions on a given market, and are trying to ride the trend for as long as possible. These traders normally enter in the market after the trend “properly” establishes itself. My core strategy in trend trading is to look for a market setup where the long time frame market structure is indicating a solid trend, and intact price action is supported properly by the low time frame charts.
What are my key indicators?
I am using trendlines, channels and moving averages to identify market structure and to spot trends. In crypto trading my core moving average indicators are the 50 and 128 daily moving averages. I am also using anchored volume weighted average price (AVWAP) analysis to identify support/resistance levels.
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