16 Juni 2020

TA Tuesday: The zig-zag price movements continue

Patrick Heusser

Patrick Heusser

Senior Trader bei Crypto Broker AG

Über den Autor

The zig-zag price movements continue.

BTC$ (4h)
Signs of a weakening trend have materialised and are asserting pressure to the downside. We touched the 8.9k support level, which we mentioned last week, in two waves.

With this move, we have turned from bullish to bearish on the Ichimoku cloud, and the current price level is right at the lower band of the cloud. I have to admit that the cloud is thin, which indicates that the price can flip-flop around the current levels. This will make the bull/bear sentiment jump around (green / red cloud).

In my opinion, we are in a very delicate situation. When I zoom out to the weekly chart, I see that we are at a crossroads: we will either break out of this multi-year triangle, or we will see a fake breakout, with a plunge right back into the middle of the triangle.

From a technical analysis textbook point of view, a breakout that rallies up from the middle of the triangle is the cleaner setup compared to what we have at the moment. Key to watch is the baseline (blue line), which comes in at 8.9k on the weekly chart.

On the topside, I believe the longer it takes, the less important the triangle formation will be. But the 10.5k level will grow in importance.

ETH$ (daily)
The consolidation took a setback and we almost reached the support level at $215. The trend is still bullish, with the price far away from the cloud; even the baseline has not been touched yet.

Switching to the 4h chart, we see a different picture. There are two warning signs of a trend reversal. We are through the baseline, which is currently acting as a resistance level, and we briefly dipped through the lower band of the Ichimoku cloud.

The cloud band is starting to narrow and if we stay around the current price levels, it will turn bearish. To me it makes sense to scale down any long positions or to even go flat. If we break lower through the $215 level, a short setup makes sense. On the top side, I need to see a proper takeout of the recent high of $250.

ETHBTC (daily)
We failed numerous times to take out the resistance level of 0.02530. This resulted in a deeper correction down to 0.02430. I am very uncertain as to which way the price will go. We are right in the middle of two large liquidity pools (0.02250 and 0.02530), with no clear indications on the chart which path will be the one with the least resistance.

Zooming into the 4h chart, we ate seeing some signs of weakness. The break into the cloud accompanied by crossing the baseline is marking the start.

I am not getting too excited, though, as the Ichimoku cloud is still very bullish and wide. In addition to this, the price has not even touched the lower band of the cloud. I see this as neutral territory, and do not see any reason to have a position on either side.

ALT$ (daily) FTX index
We have seen a nice correction since the March selloff, which currently seems to be losing some steam.

$605 looks like a good resistance level. The Ichimoku cloud is still bearish, and the price is currently just hovering around the baseline and close to the lower band of the cloud.

We recently saw a strong reaction at the $475 level. My take is that if we break it to the downside, we will head to the lows in the region of $300. The topside resistance to watch is $605.

MID$ (daily) FTX index
The MID$ index is showing a more bullish picture. $550 needs to hold for us to have a chance to go back up to the ATH.

SHIT$ (daily) FTX index
Stellar performance since the March selloff. We almost made a new ATH. In terms of the short term, $840 needs to hold so the uptrend can resume.

But to get a more sustainable and healthy trend, it would be good to see a bigger correction, which could go as deep as $660.

But for the time being, the Ichimoku cloud is bullish and the price is far away from the cloud and the baseline.