Technical Analysis of ETHUSD October 2018

Technical Analysis of ETHUSD October 2018

Introduction

Formerly the number two cryptocurrency by market capitalization, Ethereum, the smart contract and ICO launching platform has slipped to third place as it got ran over by Ripple not too long ago. At the point of writing this article, the market cap of the Ether is currently at about $23.9billion. Please note that the number 2 position is closely competed by both Altcoins and the positions often switch.

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Technical Analysis of ETHUSD October 2018

ETHUSD: Monthly Chart

Technical Analysis of ETHUSD October 2018 monthly chart

Ever since January when the price of Ethereum soars to its current highest high of $1419.96, the altcoin giant has continued to face a series of consecutive bearish closing candles, as the development team battle to resolve the scalability issues among other problems that the network is currently facing. The month of July closed in a bearish accumulation pattern, which further fuels and signals further decline as shown above on the monthly chart.

ETHUSD: Weekly Chart

Technical Analysis of ETHUSD October 2018 weekly chart

Making reference to the weekly chart above, we observe how the pair started off by breaking out of bearish closing mother bar, which was later followed by another breakout of a bearish accumulation pattern on 11 December ’17.  The bullish rally finally ended when the bulls attempted a bullish accumulation pattern, which later failed to a bearish breakdown on the 26th February ’18. Comparing the price chart to the MACD oscillator, you’ll observe a bullish hidden divergence pattern, which did not stand the test of time, failing to a bearish accumulation pattern on 14th May ’18.

As for price trading lower and below the 65-period moving average, another bullish accumulation pattern was triggered, this also failed to a bearish breakdown pattern, bringing the pair lower to where it currently is.

ETHUSD: Daily Chart

Technical Analysis of ETHUSD October 2018 Daily chart

From a daily chart perspective, the month of August is where the pair started its bearish movement triggered by a bearish accumulation pattern in early August. As the initial trend wind down to a halt, the pair entered into a long range, which gets transformed into a bearish hidden divergence pattern. An opposite bullish divergence pattern which also coincides with a breakout of bearish accumulation pattern on the 13th Sep ’18. At the moment, the pair is set for another bearish hidden divergence pattern. The breakdown of the bullish accumulation pattern will be an early entry signal to enter a short selling order on the pair from this time frame.

ETHUSD: 4-HOUR Chart

Technical Analysis of ETHUSD October 2018 H4 chart

The 4hourly chart is where we get a quick but clear idea of how the week will play out. At the moment it’s clear the pair shows bearish sentiments, as bullish accumulation patterns fail to breakdowns around September 28. As the month of September grinds to a halt, ushering in the new month, another breakdown of a bullish accumulation pattern is expected.

ETHUSD: 2-HOUR Chart

Technical Analysis of ETHUSD October 2018 H2 chart

As illustrated on the 2-hourly chart above, the bulls keep losing steam as bullish accumulation patterns fail to bearish breakdowns on the 29th and 30th September. Moving forward to more recent times, another bullish accumulation pattern fails to another bearish breakdown pattern on 2nd October. These bullish failure points leave resistance levels behind at 245.70, 238.70, and 231.08 respectively. Along with a bearish regular divergence pattern triggered on September 30, forming a confluence of events with the breakdown of bullish accumulation patterns, the market is headed towards a bearish direction.

Conclusion and Projection

Ethereum price still heads south; as a result, we are sticking with entering a short selling order on the daily chart. With a breakdown of bullish accumulation pattern building up on the daily chart we enter short trades at $225.97 with stop loss and take profit at $260.25 and $150.00 respectively. Please note that the number 2 position is closely competed by both Altcoins XRP and ETH and the positions often switch.

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