Ethereum TA: $80 accumulation zone holds strong (so far)

Ethereum Technical Analysis for December 2018

If you’ve been following me on twitter you might know I’ve been waiting for Ethereum to fall down to the $80 range since early December, where I plan to accumulate for a swing position. This range was derived from a chart I posted around that time showing a very significant trend line that showed its first sign of support back in March/April of this year.

ETH Technical Analysis
Ethereum/USD Historical trendline. See my original tweet here.

That trendline was validated, in my opinion, when it was retested and held support in early September around $175. Support at the $175 range was strong up until the most recent Bitcoin slump which brought us down to just kiss that trendline on December 6.

Support in the accumulation zone is extremely strong. As you will see in the 4 hour chart below, we’ve only been given a few brief opportunities to accumulate below $85 thus far.

Ethereum Technical Analysis for December 2018
Ethereum 4 Hour Chart 12/16/2018

The accumulation zone (green box) was first touched around 12/6 where we see a huge bounce to the 26 EMA around $96. Support was found along a more recent trendline that was confirmed after a double bottom on 11/24 and 11/27, price did not re-enter the zone until 12/15.

Keeping with the chart above, notice there is a significant support drawn at $81.76. This support is derived from levels not seen since May 2017, making this line a make-or-break kind of level for Ethereum. As it stands now, price is bouncing between the most recent trendline support (yellow) and the 34 EMA (purple).

One thing I am noticing right now is that the 34EMA has been retested 4 times since price first entered the accumulation zone on December 7. There is noticeable bullish divergence on the RSI and MACD indicators starting from this date which indicates upward momentum into these levels.

Looking at the moving averages, the 26EMA (orange) has slowly been converging on the 34 EMA (purple). This slow progression is a strong sign of organic growth and steady buying pressure to the upside.

My plan from here is to continue accumulating ETH under $85 while keeping a stop loss zone under $80. Opinions in my last Bitcoin TA still stand, I do believe that a small reversal is underway but it will take time if a natural uptrend is to form.

A natural target would be the 4HR 200 EMA which  is currently following the upper yellow trendline with precision. Accumulating in the box with this natural target around the upper trendline in the near future ($113) could yield nearly 30% in profit if this trade plays out.