Up or Down Ser? 004 - Stairway to Heaven
ETH's breakout above the cloud is tantalisingly close. Do bulls have what it takes to make it to the promised land?
ETH Market Update
So far the week has been as positive as one can expect it to be in the shadow of a moderately hot CPI print. Bulls are defending the move off the low, whilst Bears are busy digging though each other’s timelines looking for something to take offence at, ever ready to raise the pitchfork yielding mob and have someone cancelled.
Back to the CPI print, this came in hotter than expected, with the probability of a double hike (+50bps vs +25) in the March Fed meeting now running around 50%.
Needless to say, ETH needed this when consolidating under HTF resistance like I need a kick in the head. That said, the reaction so far has been muted.
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Skipping the weekly cloud in this update, as there’s been no material change since the last update. Instead, I’m going to review my range trading layout, as ultimately we remain in a HTF range.
Here we can see that price has rebounded from below the lower Bband as the bears ran out of steam, and that price is making a move back up towards the W20MA. This coincides with a bullish Stochastic cross from oversold levels, back above 20. This is generally as good a reversal setup as you get.
Provided we get no further legacy/macro/news shocks, I see no reason for us not to test the area around $3.7K in the medium term (expect this level to be front-run somewhat).
On the daily cloud, we see that price reclaimed the Daily Kijun, dipped below it on the CPI print, and promptly reclaimed it. This is a notable win for Bulls, and a sign that momentum is on their side. It also reduces the probability that the Kijun’s reclaim was a fakeout.
We also see that the Lagging Span is in the process of crossing though price, however, until it breaks though we must consider the immediate price area as a resistance zone, which, combined with the uncertainty how legacy is going to digest the CPI print is a matter of concern in the next 12 hrs or so.
In the big picture, that long beautiful, flat Cloud Span at $3.5K remains a magnet for price, and the Final Boss for Bulls to overcome. Much like the aforementioned angry mob, expect Bears to throw everything that can muster to defend this level.
Those of you who took the Edge to Edge setup on the 12H should be feeling warm and fuzzy, with the trade well in profit and now confirmed by a Bullish TK cross.
My advice here would be to front-run the TP point somewhat, as price is approaching a very significant resistance level, which, much like that date which is way out of your league, will probably require several attempts to be conquered in order to Reach the Promised Land.
In conclusion, the TCP trend reversal cloud (not show on the chart) remains confirmed bullish.
Momentum remains on the bull’s side
Macro/legacy might pee in our punch bowl due to the CPI print
Price is approaching a HTF resistance level
$3.5K area remains a magnet, bar a legacy/macro/news shock
Trade safe & have a great weekend