Ethereum (ETH) breaks support, further downside expected
Major technical levels breached. Support much further down.
Danger zone breached
I recently wrote about Ethereum (ETH) back on November 21st, 2019. In that article, I discussed at length the importance of some key Gann cycles and levels, as well as important price levels. The most important near term price level was at 171.29. The 171.29 value area is a shared level of the bottom of the current Cloud in the Ichimoku Kinko Hyo system (Senkou Span A) and the final high volume node before the next high volume node below. In trading with the Volume Profile, the most common trading strategy employed is the breakouts above or below the high volume nodes. If the Volume Profile is thin between the high volume nodes, then price has an easy time moving through those levels. I always tell people that it gets ‘sucked’ into the next high volume node like a vacuum. And that is precisely the kind of behavior that we are observing right now.
The next high volume node is the VPOC (Volume Point of Control) at $136.96. This is also the 78.6% Fibonacci retracement of the June 26th, 2019 high of $364.49 and the confirmation higher swing low of $100.15 on February 6th, 2019. But there is one other Fibonacci retracement that is of particular interest. Notice how there appears to be a triple bottom that has developed between the current low of today’s candlestick (November 21st, 2019) and the lows on September 26th, 2019, and October 23rd, 2019. The wicks on those three days all have stopped on the 23.6% Fibonacci retracement level of the bear market swing low of $80.60 on December 14th, 2018, to the confirmation lower swing high of $1171.00 on January 30th, 2018. I do want to note that these Fibonacci retracements are done on a logarithmic chart and do represent the logarithmic values for the retracements as opposed to the standard, linear retracement.
If we anticipate the next major swing low to be around the $135.12 value area, then it would be nice to identify the date that this low may occur, because it will more than likely be the low for the remainder of 2019. From the June 26th swing high, we can measure out 180-days (an important and powerful reversal cycle in Gann’s work) to get the date of December 23rd, 2019. From the 2018 bear market low on December 14th, 2019, we can measure out a full Ganny Cycle of the Inner Year, 360-days, to get the date of December 9th, 2019. There are more important Gann cycles between December 9th and December 23rd. From the first swing low of the June 26th high on July 16th, we can project out 144-days to December 7th, 2019. If we look at the triple bottom that has formed, from the date of the first swing low on September 26th, we can project out 90-day, and that brings us to December 24th. It looks like we have a fairly expansive range as far as dates, but I would anticipate that the low point and the turning point of this market will be around the 90-day and the 180-day cycles: Just before Christmas