Ethereum has been falling for a month. It has also wiped most of gains which it has accumulated in month of May and June lime most of the digital currencies. Today, Ethereum is trading with some positive bias. It is at $168.26 level currently, and yesterday it has witnessed very high spike in volume, which help Ethereum to bounce of from low level of $130.
Lets take our attention on chart below to notice that liquidity gush at lower levels.....
Beside liquidity gush there are folliwng things to take note in chart above:-
- Volumes: Their was certainly a liquidity gush yesterday at lower level. I have highlighted that jump in blue oval shape circle and anyone can notice that on chart above. Ethereum was dropping, so this liquidity gush indicate a participation of buyers at lower levels.
- Yesterday's Candle: If one look at yesterday's candle, it is certainly pointing toward some possible change of trend as that candle was hammer candle. If today's candle continued on upside and closed in green, then some more upside is possible.
- Falling Channel: Yesterday's move has also put Ethereum back in channel, so now when the lower trendline of falling channel is being tested, one can expect a now a test of higher falling trendline of falling channel.
- RSI Indicator: Basically, RSI indicator is good barometer to gauge over bought and over sold level. If a script is trading above 70 level then it is overbought sign and if script is trading below 30 level then it is oversold sign.Yesterday RSI indicator also bounce of from level 30 which is just a start of oversold level.
Lets take a look at another chart below with Fibonacci Retracements Levels...
Yesterday, Ethereum bounced from $130 and ended at $155 which is at 75% level on Fibb Retracement. If this bounce continues then Ethereum can reach upto $213 according to retracement level, but that could be a dead cat bounce and this script can fall again to test a lower levels again.
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Now The Conclusion
Their is no doubt that buyers have come back at lower levels, but to convince investors more, this script need to close above certain levels like $157, $202 and $218 level as their is still a higher possibility of resumption of downtrend after giving dead cat bounce. So, trading with appropriate stop loss and strategy or plan is ideal way to trade this script.
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