Despite a recent correction and profit-taking with bitcoin, the top five coins by market capitalization continue showing extremely strong gains. Ether (ETH) has risen over 100 percent since April 24 and has made new all-time highs (ATH) in market capitalization every day.
Hash rate however has slowed slightly, currently sitting near its ATH.
Based on inflation, Ethereum needs a significant infusion of cash per day to keep up with block rewards to remain at its current price. This could be some cause for concern for long-term holders of ETH.
GDAX continues to handedly lead the ETH-USD volume, suggesting on-ramping remains strong. The GDAX price has also begun closing in on the Bitfinex premium, which remains in place due to USD deposit and withdrawal halt on that exchange.
There is an active and near-complete bullish chart pattern, the Cup and Handle.
The chart pattern includes a matching descending volume profile for the cup as well as the handle. A resolution of the diagonal resistance should yield a break of the local high on volume. The measured move is ~$129.35 (0.0812) and the Fibonacci extension is ~$119.47 (0.075). The pattern has broken the resistance and is retesting this zone to confirm support. This is not uncommon and is known as a throwback. The stop for this trade would be a candle close on this timeframe below the tip of the handle.
Non-conservative Fibonacci Extensions from extreme low to previous high yield similar targets.
Generally, I have mixed feelings trading small timeframes like the 15 minute, but when taking into account a large amount of data, some patterns and entries become more obvious.
Using the 50/200 EMA, you can see an excellent EMA cross entry based on April 26th, which later recrosses as a close signal on May 1st. Depending on how you play stops, such as price breaking the 200 EMA, this trade would have closed sooner. Then, as the 50/200 EMA cross remains bearish, price builds a triangle which breaks just before the 50/200 EMA cross. I would look for similar conditions for a long exit and re-entry within the next few days, should the 50/200 EMA cross bearish again.
Summary
- Ethereum continues to make massive gains with no sign of stopping.
- Technicals continue to show high probability for $100+ Ethereum.
- Using low timeframes for signals is generally a fool’s errand unless you take into account a large amount of data to better understand price structure.
Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTCMedia related sites do not necessarily reflect the opinion of BTCMedia and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.