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.

I then decided to continue my analysis by moving to the weekly timeframe, and on this timeframe I could see more candles and this is because each candle here is being formed within a a period of 7days.

And looking carefully at the market, I was able to identify a key level and this level is functioning as a resistance level to the market price.

And as seen above, the market has made several touches on this level and has been unable to break above it, and as such, this level can be said to be a valid resistance level.

And to get more market information I decided to move to the daily timeframe, and on this timeframe I could see noise in the market.

I could see the presence of the buyers and sellers in the market as they show their strength in the market and I was able to spot another key level.

This level is functioning as a support level to the market and this implies that there are lots of buyers on this level, and this would prevent the market from falling further.

And getting to the 4hr timeframe, I could see the market more clearly, I could feel the presence of the bears as they have driven the market down to its support level.

And when the market traded towards this level, I could see the impact of the buyers as they are preventing the market from going any further.

And with this, I expect the market to retest its support level again before I can take my entry into the market and before then, I decided to move to the 2hr timeframe to search for an entry.

On the 2hr timeframe, I could see the market more clearly and I was able to spot another level which I expect the market to trade towards.

This level will be functioning as my take profit level and before entering the trade, I decided to search for trading confluence using the relative strength index indicator.

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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.

Applying the rsi to the monthly timeframe, I noticed that the market was being overbought, and this is because the rsi has crossed above its 80% line.

An overbought market is one that signals a bearish trend reversal of the market, that is, it shows the change in market strength from the to the sellers.

And this is in alliance with my analysis using the support and resistance strategy.

And moving to the daily timeframe, I realized that the rsi of the market has crossed above its 80% line and this is a signal that the market is being overbought.

For the market to be balanced, the sellers will have to show their strength, and this implies that we will see bearish move on the market.

And this is in alliance with my analysis using support and resistance strategy and then, I decided to move to the 2hr timeframe in search of entry into the market.

And getting to the 2hr timeframe, I placed my entry of the market on the support level I expect the market to retest.

And upon retesting, I expect to see a bullish move toward its closest resistance level which I have marked above, and there I placed my take profit position.

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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 bearish retracement then bullish move on ethusdt.