Top Down Analysis Of ETHUSDT Using Support And Resistance Strategy And RSI Indicator As Confluence
Hello great minds,
It is a great opportunity to come before you all today to share my technical analysis on eth against usdt.
I believe you are all doing perfectly well and are enjoying your activities in the community as you actively promote steemit across various social media platform.
Ethereum is a very big cryptocurrency in the cryptospace and we are well aware of this.
Ethereum happens to be the second most biggest and popular cryptocurrency in the cryptospace.
After Bitcoin which is the driver of all other tokens, ethereum is known to be the next most valuable token, and I am here to share my analysis to it.
ANALYSIS USING SUPPORT AND RESISTANCE STRATEGY
I begin my technical analysis from the higher timeframe, then I descend to the lower timeframe
On the higher timeframe, ideally the monthly timeframe, I seek to determine market trend
The monthly timeframe helps to eliminate market noise from the market and also compress the market to one screen.
And from this, it becomes very easy for the market trend to be predicted.
The screenshot above is that of the pair ethusdt on the monthly timeframe.
And as seen above, there are lesser candles on this timeframe and this is as a result of the time it takes for one of this candles to be formed.
On the monthly timeframe, it takes the time period of 1month for each candle to be formed.
And also, it is easy for the overall trend of the market to be detected on this timeframe, as we can see that the market is being bullish.
Continuing on the weekly timeframe, I could see more market activities, as each candle on this timeframe was formed within the time period of 7days.
And looking carefully at this timeframe, I was able to spot a key level, and on this level, there are more sellers than buyers, as this level is functioning as a resistance level to the market price.
And it is expected that the market be rejected to the bearish side, which shows the presence of the sellers in the market.
And to get more market information, I decided to move to the daily timeframe, as this timeframe tend to give more market information than the weekly timeframe.
Despite the noise on this market, I was able to spot another level and this level will be functioning as a support level, as this level has more buyers than sellers in the market.
On this timeframe, we can expect to see a bullish rejection on the market when it trades towards this support level.
Getting to the daily timeframe, I could see the market more clearly, I could see the strength of buyers and sellers clearly in the market as they struggle to show their strength.
And from the above screenshot, we can see that the bears are taking control of the market, as it constitutes of lower lows and lower highs.
And with this analysis, my bearish bias have been developed, and I decided to move to the 2hr timeframe to search for entry into the market.
And getting to the 2hr timeframe, I could see the market more clearly.
I could see how noisy the market is and if we look carefully, we will see an horizontal line, and above this line is a liquidity that the market is supposed to take out.
Nonetheless, I expect the market to retrace to this resistance level before continuing it's bearish move and before then, I decided to add rsi to the price chart to search for confluence in the market.
CONFLUENCE USING RELATIVE STRENGTH INDEX INDICATOR
The relative strength index indicator is an indicator that helps to identify overbought and oversold market.
When a market is spotted to be overbought, it is a bearish trend reversal signal and when it is oversold, it is a bullish trend reversal signal.
An overbought market can be spotted when the rsi crosses above the 80% line and an oversold market is detected when the market crosses below the 20% line.
I then applied the rsi to the monthly timeframe, and on this timeframe, I noticed that the market is being overbought.
And an overbought market can be seen when the rsi crosses above the 80% line, and this is a market condition when the sellers have become stronger and the buyers have become weak.
I then decided to move to the daily timeframe for more confluence to my trade.
On the daily timeframe, I noticed that the rsi has crossed below its 20% line, and as such, we can say the market is being oversold.
An oversold market is one that signals a bulllish trend reversal, that is, a market condition showing the weakness of the sellers and the strength of the buyers.
With my bearish bias of the market, I continued on the 2hr timeframe to search for my entry.
And looking at the market carefully, I placed my entry on the resistance level above the liquidity, as I expect to see the market take out liquidity.
And then my take profit was placed on the closest support level to the market.
CONCLUSION
I have shared my analysis on ethusdt beginning from the monthly to the weekly to the daily and to the hourly.
From my analysis, I expect to see a bearish move on ethusdt.
https://x.com/JuecoYoung/status/1807154940839948352
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