Ethereum Corrected After Hitting Highest Price

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Avatar for icha2205
3 years ago

Although last week there was $ 1.5 Billion Ethereum exiting the exchange due to significant selling pressure, currently ETH has managed to reach new heights again. It is not clear what causes impulse buying to happen slowly.

Most likely this impulse to buy was due to the slow accumulation of transactions from retail investors and some institutional investors. This accumulation occurred when ETH crashed alongside Bitcoin last week in one of the biggest crypto market corrections of all time.

There have been no detailed publications about institutional investors buying Ethereum, but looking at the previous moves, it can be assumed that there is strong buying pressure by big players due to the significant appreciation.

However, after hitting new highs, Ethereum has seen a deep correction since 8am WIB. This correction occurs just an hour after ETH hit a high and raises the question of whether it is now a good time to buy.

This answer can be seen from the technical side if you want to analyze it in the short term. Currently, the 1 hour Ethereum price movement candlestick is showing a correction pattern.

This pattern is commonly referred to as bearish harami, which currently continues to turn into a dark cloud. Generally this pattern shows that the price will continue to move downwards due to the candlestick pattern theory.

The pattern is complemented by the RSI Indicator which shows that the price has touched the overbought zone. This zone indicates that the price is saturated due to excessive buying transactions.

Generally if the two patterns meet, there is a high probability that the price will go down. However, this decline still has two possibilities where the price can be retested or depreciate further.

Looking at the previous price which rose from the 61.8% Fibonacci point which is the golden ratio indicating appreciation, it is likely that the decline is only a temporary correction. So that in the long run the possibility of Ethereum getting higher is still very large.

However, looking at Ethereum's 1 Hour moving chart, the potential for deeper depreciation is still possible. This potential is demonstrated by the previous move when Ethereum touched the All Time High prior to today.

At that time, it was seen that ETH touched a new high around $ 1,437. After hitting that price, Ethereum has depreciated by around 27.5%.

At that time there were several signs of correction and depreciation, namely the candlestick pattern along with the RSI moving towards the overbought zone. At that time, the candlestick formed a bearish engulfing pattern along with the RSI movement towards the overbought zone.

Given that currently the same thing is happening, investors and traders should be careful and prioritize risk management. This is because although appreciation is still possible, a correction that will cause depreciation as before to the lower limit of the long-term appreciation zone is still possible.

Therefore, if an investor or trader wants to make a purchase, it is better if the implementation of a risk management strategy such as dollar cost averaging can be applied. This strategy is recommended so that if after buying the price turns down, there are other funds so that losses can be minimized.

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Avatar for icha2205
3 years ago

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