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.
Then I continued my analysis from the weekly timeframe, and on this timeframe, I could see more market activities, as each candle is being formed during the space of 1week.
On this timeframe, I was able to spot a key market level, a level which is functioning as a resistance level to the price chart.
And as seen above, the market has traded to this level already and has been rejected, which is expected to happened.
And to get more market details I continued my analysis on the daily timeframe.
On this timeframe, I could see the presence of buyers and sellers, as they struggle to push price to their preferred direction.
Also on this timeframe, and spotted another key level, a level which is functioning as a support level to the market price.
And it is expected that when the market gets to this level, it will be rejected to the bullish side.
Moving to the 4hr timeframe, the market became very noisy, and I could see how the market formed series of lower lows and lower highs, as it tend to approach this support level.
With this price movement, my bearish bias of the market became strengthened, and I was able to spot a minor level which I'll love to trade the market from.
I then moved to the 2hr timeframe, as it is on this timeframe I take my entry into the market.
Moving to the 2hr timeframe, I saw the market movement more clearly.
And I decided to place a sell order on the market but before then, I decided to make use of the rsi indicator as a confluence to my trade.
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.
Beginning with the monthly timeframe as usual, I noticed that the rsi has crossed above its 80% line, and this is an indication that the market is being overbought.
An overbought market is expected to be sold, that is , we expect to see a bearish trend reversal.
And this is in alliance with my analysis using support and resistance strategy.
Then moving to the daily timeframe, I noticed that the rsi indicator is approaching its 20% line, and this is an indication of the market being oversold.
An oversold market needs to be bought, that is, the market is expected to experience a bullish trend reversal.
Whenever the market gets to its 20% region, it is signalling a bullish trend reversal.
Moving to the 2hr timeframe, I noticed that the rsi has approached it's 80% line, which is an indication of a bearish move.
And with this, I decided to enter a sell order from the minor level I detected and I placed my take profit on the closest support level to the market, just as seen above.
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.
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https://twitter.com/JuecoYoung/status/1785780840905003075