Ethereum bullish potential reversal pattern.
A few weeks ago we spotted a potential Head and Shoulders pattern on this pair, which although didn’t play out exactly as it should have started the downtrend in this pair. That Head and Shoulders pattern failed in its symmetry class hence the sporadic follow through. Fast forward a bit and we have found an inverted Head and Shoulders pattern and this again has failed in symmetry . Have a look:
The spike on the left shoulder would normally invalidate this pattern but the fact that the pattern exists suggests that bulls may still use it as such. Let me briefly explain why that might the case. I trade the most liquid assets on earth for clients … Forex. In my experience a pattern is valid in that market due to the wide consensus or liquidity. In cryptocurrency market we have to give patterns a bit more lee-way since there is much less liquidity hence we get the constant spikes in either direction and have to be careful of which spike to analyse and which ones to ignore.
For added visuals I put the “fail icon” next to the spike in question. I’m not sure yet if the market agrees with the bullish reversal pattern but it does give us some levels and let’s us know when we are right or wrong. Bulls would be targeting the $10 level and trying to sustain a move above that. Bears would be trying to target the $5.61 level but with BTCUSD in rally mode may be cautious of shorting this pair.
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Disclaimer: This is not trading or investment advice.