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

Source

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 bearish

Continuing my analysis in the weekly timeframe, I could see the market more clearly and I could see that this timeframe has more candlestick than the monthly timeframe and this is because each candle on this timeframe is being formed within a trading period of 7days.

And looking carefully, I was able to identify a key level and this level is functioning as a resistance level to the market price and the market is expected to be rejected whenever it trades towards this level.

And from the screenshot above, we can see that the market has made several touches on this resistance level and has been unable to break above it, which confirms the validity of this level.

And moving to the daily timeframe, I could see more candlestick which indicates the presence of the buyers and sellers in the market.

I could see the struggle between the buyers and sellers as they strive to drive the market to their preferred direction.

And looking carefully, I was able to identify another key level and this level is functioning as a support level to the market price, and the market will be expected to be rejected when it trades towards this level.

And this level can be said to be a valid level as it has been tested and respected severally by the market.

I then continued my analysis on the 4hr timeframe and on this timeframe, I could see lots of noise in the market, I could feel the presence of the buyers and sellers as they struggle to drive the market to their preferred direction.

And again, I was able to identify another key level which I indicated which an horizontal line, and this level is where I intend to place my take profit position when I long the market.

And with this, I decided to move to the 2hr timeframe in search of entry into the market.

And getting to the 2hr timeframe, I could see the market ranging and I realised that it has just been rejected from its support level and I expect it to retrace and retest this level.

And this has given me my bullish bias of the market, and then I decided to search for confluence using the relative strength index indicator.

---

---

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.

And moving to the monthly timeframe, I decided to add the rsi indicator and I realised that the market is being oversold, and this is usually detected when the rsi crosses below its 20% line.

An oversold market often signals a bullish trend reversal of the market, that is, a change in market strength from the sellers to the buyers.

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

And moving to the daily timeframe, I could see the rsi below its 20% line, and this is an indication that the market is being oversold.

And as explained earlier, an oversold market signals a bullish trend reversal of the market, that is, it shows the strength of the bulls over the bears.

And then I decided to move to the 2hr timeframe in search of entry into the market.

And then I decided to move to the 2hr timeframe in search of entry, and then, I placed my entry on the closest support level and my take profit was placed on the closest resistance level to the market price.

---

---

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 bullish move on ethusdt.