by Jamie Holmes
After establishing a ceiling around $14.80, the market for ETH-USD has pushed lower today. The price is currently down 0.87% on today’s opening price on the Kraken exchange, trading at $14.32450. The chart below shows the 4-hour price action and shows that the market has attempted to break below $14.00 however a move below this psychological level has been rejected so far.
The chart below shows the most recent fractal buy and sell levels which act as support and resistance respectively. The market is currently below the most recent fractal support at $14.35470. Therefore, we expect bearish momentum to dominate. This will be further confirmed when there is a 4-hour session close below the base line which is currently offering support at $14.28 and this would open up a test of the support zone provided by the Ichimoku cloud, i.e. around $12.93 and $13.60.
On the other hand, if the market manages to close back above the fractal support at $14.35470, then sideways trading is expected until the fractal resistance at $14.79997 is broken. If this occurs, then bullish momentum will be expected to dominate with an attempt at $15.00 to follow. The Ichimoku cloud is not trending either upward or downward presently, suggesting range trading will dominate.
The longer-term outlook is displayed below with the daily price action and also illustrates that bulls in the market may be losing dominance. The first thing to notice about the chart below is that today’s price action has made a lower low and a lower high than yesterday’s price action, so the immediate trend is downward.
Secondly, the price action has tried testing support provided by the conversion (blue) line at $13.905; if today’s closing price is below $13.905 then this indicates bearish momentum will start to dominate over the long-term. Sellers would then look to target the most recent fractal support just above $13.00.
Thirdly, also notice that the price action over the past few days established a close above the most recent fractal resistance at $14.39999 but currently the price has faded below this level suggesting this fractal has not been broken and will hold as strong resistance. Since the price action is closer to a key fractal resistance on the daily timeframe, there is less resistance to movement to the downside and we should see bearish momentum dominate.
On the other hand, if today’s close is above $14.39999 then this will provide a bullish outlook as the fractal resistance at this level would have been broken. This would open up $14.85 and the psychological $15.00 level. However, when looking at the lagging line (the green line 26 periods behind), this tells us the current market direction is down as the line is pointing downwards and therefore the risk is more weighted to the downside for ETH-USD going forward.