Ethereum Merge Coil
Trade Plan
Watching for wide range, high volume bars to breakout at the boundaries of the triangle.
Downside breakout profit target: 1283 - 1000 - trading range from June-July
Upside breakout profit target: 2030 - 2160 - Mid-August high to January low
Bias
Neutral - the downward direction of the trend channel from the weekly chart favors shorts. However, prices are in the middle of the trend channel so a breakout from the triangle could see a rally to the mid-August high or the upper boundary of the trend channel and resistance at the January 2022 low of 2160.
Key Takeaways
Price Action Analysis
After brief consolidation in the second half of May and early June, Sellers entered the market in the middle of June, pushing prices down through long term support at the January 2018 high of 1529 on strong volume. The selling climaxed on June 18 at a low of 883.60 after falling nearly 50% from the June 10 breakdown. Buyers were pulled into the market by the severe sell-off as prices approached support at the April 2018 high of 838. Ether closed the following day over 200 points up from the previous days low.
From the June 18 low, a trading range developed between 1050 and 1283 until prices broke higher in the middle of July. Buyers drove prices back above support at 1529, where supply temporarily halted gains, eventually pushing prices back down to 1357 on July 26 in a retest of the breakout.
Since the retest, prices have coiled on low volume between the July 26 low and the August 24 high of 2029. This "coiling" action is depicted by the triangle created by trend lines A and Z. It is also interesting to observe that the majority of the price work within the coil has revolved around long term support at 1529 and that the apex of the coil occurs on October 17 right at 1529.
Historical Context
The bold downward trend lines running across the top half of the chart are a downward parallel channel taken from a trend line draw across the November 2021 and March 2022 high on the weekly chart. The "control" line of this channel also intersects with the apex of the triangle and long-term support on October 17.
Watching for wide range, high volume bars to breakout at the boundaries of the triangle.
Downside breakout profit target: 1283 - 1000 - trading range from June-July
Upside breakout profit target: 2030 - 2160 - Mid-August high to January low
Bias
Neutral - the downward direction of the trend channel from the weekly chart favors shorts. However, prices are in the middle of the trend channel so a breakout from the triangle could see a rally to the mid-August high or the upper boundary of the trend channel and resistance at the January 2022 low of 2160.
Key Takeaways
- Prices are coiling around long term support at 1529.
- The "control" line of a downward parallel channel from the weekly chart runs through the coil
- The coil, long term support, and downward parallel channel all intersect at 1529 on October 17
Price Action Analysis
After brief consolidation in the second half of May and early June, Sellers entered the market in the middle of June, pushing prices down through long term support at the January 2018 high of 1529 on strong volume. The selling climaxed on June 18 at a low of 883.60 after falling nearly 50% from the June 10 breakdown. Buyers were pulled into the market by the severe sell-off as prices approached support at the April 2018 high of 838. Ether closed the following day over 200 points up from the previous days low.
From the June 18 low, a trading range developed between 1050 and 1283 until prices broke higher in the middle of July. Buyers drove prices back above support at 1529, where supply temporarily halted gains, eventually pushing prices back down to 1357 on July 26 in a retest of the breakout.
Since the retest, prices have coiled on low volume between the July 26 low and the August 24 high of 2029. This "coiling" action is depicted by the triangle created by trend lines A and Z. It is also interesting to observe that the majority of the price work within the coil has revolved around long term support at 1529 and that the apex of the coil occurs on October 17 right at 1529.
Historical Context
The bold downward trend lines running across the top half of the chart are a downward parallel channel taken from a trend line draw across the November 2021 and March 2022 high on the weekly chart. The "control" line of this channel also intersects with the apex of the triangle and long-term support on October 17.
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