The market has been teasing a breakout higher, but has failed to do so. A downside move could occur at anytime.

 

Ethereum indicating an imminent pullback

 

On the chart above, you can see some apparently random red horizontal lines. These horizontal lines, while they do appear random, are not. They are the VPOC (Volume Point of Control or just Point Of Control) of each session. Essentially, we are seeing the point of control for each intraday session. The POC on a daily session is no different than viewing the POC on a visible or fixed range. The POC is a source of equilibrium and price level that represents fair value. More importantly, it represents the price level where the most amount of buying and selling has occurred. This creates powerful and important support and resistance levels. When price is trading above the POC, we are in a bullish move and the POC becomes an area of support. If we are trading below the POC, then we are bearish and the POC becomes resistance. For the current trading session (May 29th, 2019), Ethereum (ETC) has rallied from a low of 260.24 to an intraday high of 274.25. Traders have made several attempts to trade Ethereum higher towards the key 275 value area, but they have not been successful. In fact, Ethereum has spent most of the New York session trading below the POC and all attempts to trade higher have been rebuffed.

 

Ichimoku signals a warning

 

On the chart above, I added the Ichimoku Kinko Hyo system. The choppiness of the trading day is a perfect example of the kind of behavior that occurs when price is within the Kumo. We also see another source of resistance, besides the POC. The top of the hourly Kumo is an extremely strong area of resistance and this is especially true because the Kumo is a thick Kumo (Kumo thickness determines strength or weakness). Price has also fallen below the hourly Tenken-Sen. There is a possibility of some support near 267. The Kijun-Sen is one of the most powerful sources of resistance and support in the Ichimoku system. The Kijun-Sen is resting just below price and price is also near the bottom of the Kumo, creating a substantial support level. I remain extremely bullish on Ethereum and the broader cryptocurrency market – but I do believe a pullback is warranted and necessary, especially with Ethereum. Ethereum is near the extreme mean range that it typically will move from the daily Kijun-Sen before experiencing a mean reversion. I look forward to that opportunity both as a short-term shorting opportunity on the way down, but also an excellent long opportunity to buy at that key support level. I will be watching what price does as it gets closer to the Kijun-Sen and the bottom of the Kumo.