Hi friends! Welcome to this update analysis on Ethereum!Looking at the four hour ETH chart, you can see that the hypothetical head and shoulders
pattern, that we identified in the "MagicPoopCannon's Visionary Workshop" post, is developing as planned. On February 2nd, I gave you the inverse head and shoulders
pattern. Since then, we've already traded form $742 to a high of $904 — a gain of 18%. Even if the proposed head and shoulders
pattern breaks down, and fails to breakout (which isn't likely to happen) this has still been a fantastic trade. At this point, however, we are beyond the hypothetical. My visionary work is now becoming reality. Now, we have to assess where we go from here. You can see that ETH is currently pushing directly into the pink neckline of the inverse head and shoulders
pattern, making a breakout seem imminent. Interestingly, you can also see that ETH is now above the 50 EMA
(in orange) and the 50% retracement
level as well. On the MACD
, you can see that it has been trading slightly sideways, and has just performed a weak bullish
crossover. Furthermore, the MACD
shows a weak bullish divergence
,) in which the MACD
has made equal lows, while the price action has made lower lows. This bullish divergence
in ETH is a bit weaker than what I see in other areas of the market, but I think it is simply due to ETH's overall resilience, in comparison to those other assets. So, for now, we need keep a close eye on what happens here, at the pink neckline of this inverse head and shoulders
pattern. A breakout will likely send ETH straight up to the top of the channel, which is intersecting with the 200 EMA
(in purple,) at the moment. This intersection of two resistance levels will strengthen the top of the channel, so a breakout above there, could create a powerful surge higher. As I'm sure you've noticed, I've thrown a target up on the chart as well. You can see the black dotted vertical trendline
, that extends up from the potential breakout zone. The top of that line, represents a move to the full potential of the inverse head and shoulders
pattern. For now, I have placed the target at the 23.6% retrace, which has been fairly reactionary. The measurement of the inverse head and shoulders
pattern suggests a test of the high made on the 28th, but we will take it one step at a time. Keep in mind that this pattern is not officially complete, until we see a breakout above the neckline. Also, don't forget that it is possible to see another drop lower, as the pattern may retest the left shoulder. There is no evidence yet that this sort of move will develop, so our primary focus is on the reactionary nature of the neckline resistance. I will keep you posted as the chart develops.
PS. I'm just about to post this and it looks like it wants to break out. Good luck everyone!
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
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