From the last few weeks, we can see tight consolidation in most of the Cryptocurrency prices. When we look at the Daily chart of , we can notice that Price Action is moving in a tight consolidation between 2200 – 2900. This particular consolidation is interesting because of the context in which it has appeared.
PRICE ACTION OF ETHEREUM | 1D CHART.
The Consolidation is taking place right after Ethereum has fallen by more than 60% from its peak value. If you try to see the logic behind the Price Action, you can notice that uninformed buyers are getting Trapped within the consolidation.
People, who are rushing to buy the dip in Cryptocurrency, need to keep in mind that the present Parabolic Fall which we have seen in Ethereum is not a normal correction. If you want to know why then take a look at the Volume.
Despite the 60% selloff in Cryptocurrency prices, Trading volume is still stagnant. If the market had good buying pressure then right after the fall we might have seen some good increase in the trading volume, but that didn’t happen.
Apart from that, the consolidation looks like a Pullback Pattern. As most of you already know, Pullback is a trend continuation setup, which means the Previous trend is likely to continue further. So in this case the previous downside momentum which we have seen in the parabolic fall can continue again after the consolidation.
Looking at all these observations, it’s obvious to conclude the Prices are more likely to go downside. But at the same time, if we see any positive news or any Institutional Orderflow, the prices can shoot up and retest the previous Resistance zone or peak value at 4000.
So if you’re planning to Trade Ethereum, make sure to keep an eye on the price action and take positions according to market sentiment. Also don’t forget Risk management, which is super necessary to trade in these types of market conditions.