A look at Ethereum, trade opportunities
Rising waters float all boats. That kind of statement is certainly indicative of the ‘major’ cryptocoins (Bitcoin, Ethereum, and Litecoin). As an investment idea or a long-term hold for trading, Ethereum and Litecoin are both coins to consider, with Ethereum being the best out of the two.
One of the most important variables that investors look at when identifying value or growth is the market cap of an instrument related to its peers in its own industry or sector. Currently, Ethereum is the little brother of Bitcoin and the second highest market cap coin. It is also the only other coin that the CME and CBOE have indicated they are looking at creating a futures contract for.
So what does that mean for Ethereum? A lot. It means we have a great probability of further upside than where it is currently at. We also have some good trade and entry areas right now.
1. If we look here we can see something I’ve pointed out in the previous analysis’ of this pair. We have a clear trading range with a Bollinger Squeeze that went on for quite some time and respected the support and resistance areas.
2. Here we have the expansion phase. What made this move up so straight was that our oscillator was not showing any overbought conditions on the breakout, this means that we get a very, very high probability of a blow-off to the top side without much interruption.
3. What we have forming on the 8 hour is a fairly bearish candlestick. We are also closing on that candlestick near a psychological resistance area in addition to a decrease in the Bollinger Band expansion.
4. The oscillator is also displaying some bearish signals. It is very much in overbought territory.
What to look for
Ethereum should be considered a laggard compared to Bitcoin. What I am seeing the same kind of price behavior that we had in Bitcoin on its rise. Only lower and faster time frames, we have been in overbought conditions for a while now. So what we can expect is that Ethereum will also behave this way. Be careful of shorting this pair right now. Also, if you are nervous about going long with some of these bearish signals, you may want to go longer closer to the $800 area. When price reaches closer and closer to that area, expect it to touch $800 and beyond.