Top Down Analysis Of ETHUSDT Using Support And Resistance Strategy And RSI Indicator As Confluence

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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.

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ANALYSIS USING SUPPORT AND RESISTANCE STRATEGY

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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 by moving to the weekly timeframe and on this timeframe I saw more market activities.

And the candlesticks on this timeframe is more than those on the monthly timeframe as each candle is being formed within the timeframe of 1week.

Looking carefully at this timeframe, I was able to spot a key level which is functioning as a resistance level to the market price.

And it is expected that whenever the market gets to this level, it gets rejected to the downside.

I then continued my analysis by moving to the daily timeframe, and on this timeframe, I could see the buyers and sellers struggle to push price to their preferred direction.

On this timeframe, I noticed that the market has traded to this resistance level and it has been rejected to the downside.

It is from this rejection that we seek to enter into the market, but there have been several rejection candles, and then I continued my analysis by moving to the 4hr timeframe.

Getting to the 4hr timeframe, I saw more market activities, I could see noise in the market.

I could see the bears and bulls struggle to drive price to their preferred direction and from the above chart, we can see the bears taking control of the market.

We can see the market forming series of lower highs and lower lows, and this can be confirmed by the bearish break of structure I indicated in the chart above.

I then moved to the 2hr timeframe for more Analysis and entry into the market.

From the 2hr timeframe, I was able to spot a key level which is functioning as a valid support level to the market price.

From the above screenshot, we can see that the market has made several touches on this level which will make this level a valid one.

And with this bias, I expect to see a bullish move of the market price and before then, I decided to make use of rsi as a confluence to the market.

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CONFLUENCE USING RELATIVE STRENGTH INDEX INDICATOR

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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.

Adding rsi to the price chart, I decided to add to the monthly timeframe before proceeding to other timeframe.

On the monthly timeframe, I can see that the rsi has crossed above its 80% line, and this is an indication that the market is being overbought.

And an overbought market is one that signals a bearish trend reversal, that is, the market is expected to embark on a momentary bearish move.

I then proceeded by adding the rsi indicator to the daily timeframe.

And on this timeframe, I noticed that the rsi is approaching its overbought level, that is, it's 80% line.

And this is known to be a bearish trend reversal signal, that is, the market is expected to experience a bearish move momentarily.

Then moving to the 2hr timeframe where I search for my entry.

I noticed that the market is being overbought as it has approached it's 80% line.

And I already have a bullish bias of the market but I expect the market to retrace a little to the support level so I can place my buy order into the market.

I then proceeded to place my buy order on the closest support level to the market and my take profit on the closest resistance level to the market, just as seen above.

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CONCLUSION

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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 bullish move on ethusdt.