Ethereum’s Short-Term ChannelSince October 10, Ethereum has been trading inside of a descending channel. At the time of writing, the Ethreum price was trading right on the resistance line of this pattern. Also, the 100- and 200- period MAs have made a bearish cross. The 200-period MA previously served as support and has been very reactive to price movement. It currently is at $180, so that may be an optimal place to put a stop loss — instead of $179, as suggested in the tweet.
Long-Term WedgeHowever, looking at the longer-term, we can see that Ethereum has been trading inside of a descending wedge since June 26. At the time of writing, it was also at the resistance line of this wedge. Additionally, the 100- and 200-day MAs have made a bearish cross and are offering resistance to the price. Since both resistance lines coincide with each other, a much more profitable trade can be initiated using the descending wedge. An entry point of $177 with a stop loss at $181.5 and a target around $140 would give a nearly 10:1 R:R ratio, as opposed to the 3:1 in the descending channel. While we are not recommending that a short be initiated, in this case, the R:R using the long-term pattern is much larger than using the short-term one — even if the stop losses are placed at very similar levels. Do you think Ethereum will increase above $180? Let us know in the comments below.
[Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.]
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.