Ethereum’s price is forming the last wave of the short-term downward trend. After this wave ends, the medium-term structure will begin to form. There will be a good chance for increased volatility.
The first wave of almost any trend is usually formed by big traders. By pouring in big capital, they provoke the mass of small traders into either selling or buying an asset. Trading volume usually falls at key levels of any trend, because the majority of traders don’t know where the price is going to go. Because of that, those that do make the first step are clearly expecting something, and have access to big money. After the first wave, the picture of buy and sell stop orders becomes clearer, upon which one can tell what is the most profitable potential situation for the large player. In our case, the first wave of the short-term trend was between $11.5 – $10.5. After the price has fortified within the second upward wave, the third one has followed, during which the big trader was collecting his profits. The third wave has stopped near $9.5, and now the scenario may repeat itself.
Judging by the buy and sell stop orders, we can predict that if the big trader starts selling Ether again, it will only be profitable until $7. After that, the picture of stop orders is repeating, albeit on a larger scale. That is why if the price fortifies near $7, there will be a chance for a fall towards $5 or lower. In regards to a potential upward trend, in case of Ether’s price breaking through $10.3, it will likely head towards $13 – $14, because after buying up a large volume near the key level of $10.3, it would be reasonable to keep buying until large orders begin again, which happens exactly at $13 – $14. In that case, the big trader will be able to make a profit.
That means that $10.3 is the decisive point, or a key level for the development of the medium-term trend. The basis of the last short-term wave is near that level, which is why it is considered the last one. That is also confirmed by the technicals – the Fibonacci retracement and the diagonal channel are intersecting at $10.3. Thus, in order to grow, Ethereum has to fortify at $10.3 and form a turn to growth. Under such conditions, there will be a good chance for an upward trend towards $13 – $14.
The downward trend continues. Ethereum Classic is being sold regardless of the fact that the price is currently at its most profitable position, in regards to historical minimums. It seems that the overall sentiment among traders is extremely negative. ETC’s price is approaching the peak of the downward trend, where the bulls may show themselves. That way, there will be a chance for the volatility to grow.
If the zones, which are profitable for either the bulls or the bears, are reached the volatility will grow, which will allow the price to equalize the chances for both sides. For example, in the current situation, the price is situated in a zone, which is profitable for short-term buyers. If the bulls do show themselves, the price will go in the opposite direction, towards the zone which is profitable for the bears. That zone is situated near $0.92, and is followed by another one near $1. That means that the price will experience resistance at those marks, and if a fortification takes place at $0.92, it will likely be followed by growth towards $1.
Key technicals where a change of trends is most likely:
- The downward trend on Ethereum is close to being completed. But for a more likely sign of growth, the price has to fortify and form a turn near $10.3.
- A good sign for growth on Ethereum Classic will be a fortification and a turn near $0.92. Given those conditions, there will be a good chance to reach at least $1.