Ether Price Analysis: China – s ICO Kerkban May Lead to Further Pull-backs
After Quehacer Day weekend, many ETH-USD traders were astonished to find a 30% market druppel overheen the course of Trio days. After an initial druppel to the $330s, the ETH-USD market suffered another deepthroat spil China announced it will be banning ICOs and conducting rigorous investigations into several of the newer coins such spil NEO and OMG. This announcement from the Chinese government prompted several large Chinese exchanges to start delisting coins under investigation. After all wasgoed said and done, the druppel to $280 marked a 38% retracement since ETH-USD bull run from $130 to $400 values:
Figure 1: ETH-USD, 4-Hour Candles, GDAX, Macro Bull Run
After watching the test of the macro 38% Fibonacci Retracement values (shown above), the ETH-USD markets managed to bounce to the 23% retracement values. At the time of this article, the market is presently finding support at 23% retracement but the steam to proceed a sustained bull run is waning.
Looking closely at the current trend, wij can see a potential bearish continuation pattern called a Bear Flag:
Figure Two: ETH-USD, 4-Hour Candles, GDAX, Potential Bear Flag
A Bear Flag is a bearish continuation pattern that is characterized by higher highs, higher lows, and decreasing volume. Bear Flags are found at the bottom of bear runs and are sometimes referred to spil Bull Traps because bullish traders are often caught ter thesis patterns by mistaking the rally for a macro trend reversal.
Typically, the Bear Flag is formed by strong bullish traders buying what they predict is the bottom of the bear run. The initial purchasing power of the bulls commences to shove out the bears who either wish to take profit or were late to the bear run this is called a brief squeeze.
However, one key characteristic to observe out for ter trends like this is the drastically decreasing volume via the length of the run. The decrease te volume essentially shows the lack of buyers ter the market spil the price starts to climb, level out and ultimately switch roles.
To calculate where the potential price target of this Bear Flag is, wij voorwaarde very first calculate the pole length of the flag:
Related movie: Python Requests Tutorial – Bitcoin Price API
Figure Three: ETH-USD, 4-Hour Candles, GDAX, Bear Flag Pole Length
If this pattern violates down and proves to be a successful Bear Flag, wij can expect to see an approximate $90 budge downward from the point of breakout. Te our case, wij could expect a retest of the of the 38% Fibonacci Retracement values ultimately leading to a test of the 50% retracement values shown ter Figure 1.
Spil always, it is paramount to confirm the trend before trading it. Albeit Bear Flags are strong patterns and tend to have a high degree of success among some of the more seasoned traders, it is entirely possible the market could see a flood of volume to propel the price higher, alternatively, the price could simply level off and consolidate sideways. There is no rule that states the market voorwaarde proceed downward. However, for those looking to trade this pattern, it is advisable to wait for a downward price movement to be confirmed with strong, bearish volume.
Figure Four: ETH-USD, 1-Day Candles, GDAX
Zooming out to the 1-day candles, wij see indications that a sustained bear market could be ter store for ETH-USD. The 1-day candles expose a bearish MACD with no clear signs of divergence (bearish momentum loss). A bearish macro MACD and waning volume on the lower timescales is a fine indication of a potential prolonged bearish continuation.
China announced a kerkban on ICOs and began delisting several newer coins from their major exchanges.
There are macro and micro signs that a bearish continuation could be te store for ETH-USD.
Should the Bear Flag pauze to the bottom, wij can expect a test of the mid-$200s.
Trading and investing te digital assets like bitcoin, bitcoin metselspecie and ether is very speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Tijdschrift and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed spil an endorsement or recommendation to buy, sell or hold. Past spectacle is not necessarily indicative of future results.