So we are here, on the 2nd of April. The market kept moving in the direction as we we discussed yesterday. Status: down a bit.
Now comes the question, what’s next ?
In order to answer this question let us take a look at the bigger timeframe. It will also explain why I keep quite bullish stance, despite the short term decline.
Here is the 2 Hour chart:
So, what do we have here? Actually, very interesting picture. The leading wedge. It’s pretty rare pattern in itself. But we seem to have two of them! ETHBTC somehow likes to build diagonals? Looks like it does, and normally this has a reason.
The diagonals take place where there is a kind of balance between bulls and bears. Bulls are still a little bit stronger but not strong enough to build a new standard impulsive wave. The leading diagonals are always retraced deep because of these almost balanced forces. So, we see wave “I” retraced a bit deeper then 0.618. This is where wave “II” finished and immediately became the next leading diagonal!
To be honest, I’ve never seen two diagonals right after another. I keep a very close look on how the whole structure developes. But, if I take the general sentiment into account, it makes somehow sense, to have two diagonals. On one side, we have plenty of great supporting activity on Ethereum, on the other side we have so much positive news for the Ethereum lately, yet the price isn’t able even the brake the 0.03. Therefore it is no wonder that quite some traders are turning quite bearish at the moment. Eventhough the first DAO crowdsell went like a storm, collecting 5.5 mln in just about 14 Hours !
As a trader, what should one do in this situation ?
Observe the critical levels and check how the Elliott Waves structure develops.
The levels we are closlely monitoring are:
- if we go slightly below 0.02570 and then rise above 0.02850, the main count will be confirmed
- if we go below 0.02350, the leading diagonal 1 will be invalidated, and we will need to check the structure of the wave down from 0.02950 more closely to see if it fits the alternate count
- finally, should ETHBTC suddenly brake 0.02950 on the way up (before going below levels, mentioned above), it would make a strong case for the wave 3, which is also a part of “III” and should be the most erratic advances during the next weeks.
Take care and stay tuned. I will post the next update tomorrow in the evening (european time)