by Jamie Holmes
Volatility has subsided in ether markets over the past few days, with the markets unsure on the next direction for ETH-USD. After hardly changing over the past three days, ETH-USD is gyrating around the $11.00 psychological level. Volumes on the Kraken exchange have fallen as well. A time of low volatility is the perfect time to get in on a directional trade before the market decides on the next move.
The chart below shown the 4-hour price action for ETH-USD on the Kraken exchange. The price action is above the Ichimoku cloud suggesting a bullish outlook. The most recent fractal buy and sell levels are indicated on the chart at $10.80052 and $11.20000. We should see bullish momentum intensify if ETH-USD manages to break above $11.20. This would open up a test of the psychological $13.00 handle. On the other hand, a break below $10.80052 will most likely see ETH-USD dive below $10.00.
The chart below illustrates that the Ichimoku cloud is very thin suggesting only weak support is found around the $10.00 level up until Thursday. The chart also shows that the base (red) line and conversion (blue) line are starting to converge, possibly indicating an imminent crossover which would indicate a switch to bearish momentum once the base line moves above the conversion line.
The Awesome Oscillator is signalling that momentum is starting to turn bearish over the short-term, as the oscillator is turning red and starting to trend down. An exaggerated downward move will be anticipated if the Awesome Oscillator breaks below the zero threshold.
The longer-term outlook is illustrated below with the daily price action for ETH-USD. The market is attempting to break resistance provided by the base line, currently at $11.1196. A daily close above this level will provide a bullish signal and see ETH-USD continue to rise over the long term. Moreover, the Ichimoku cloud looks to be changing color from red to green and once this is confirmed, this will give further bullish confirmation.
Once ETH-USD manages to close above the base line at $11.1196, then we should see the market eye resistance provided by the Ichimoku cloud, that is up to $15.3981 (upper span of Ichimoku cloud).
The most recent fractal levels are also indicated on the chart. A daily close above the fractal sell level at $11.60813 should see bullish momentum dominate over the long term. However, if the base line holds as resistance and ETH-USD is not able to sustain above $11.1196, then we should see ETH-USD tend towards fractal support at $7.00.
However, on the daily timeframe, momentum is turning bullish as compared to the past few days. The Awesome Oscillator is trending upward and is green, suggesting the market is leaning more toward upward momentum. However, the Awesome Oscillator is still below zero and further bullish confirmation will be given once the indicator starts to register positive values.