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 bearish.

I then continued my analysis by moving to the weekly timeframe and on this timeframe I could see the market more clearly, I could see more candles on this timeframe than on the monthly timeframe.

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 above screenshot, I can see that this level is a strong level as the market has been unable to break above it, and there is always a rejection when the market trades towards this level.

And moving to the daily timeframe I could see the market more clearly, I could see series of bullish and bearish candles as the buyers and sellers are showing their strength in the market.

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

On this level, there are more buyers than sellers and as a result, the market is unlikely to continue falling unless the selling pressure outweighs that of the buyers.

And moving to the 4hr 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 looking carefully I noticed that the bears are in control as the market kept forming lower lows and lower highs as it approached towards the support level in the market.

And when the market got to it's support level, we can see that it made no further lows rather it made multiple touches on this support level which shows the presence of the buyers.

And getting to the 2hr timeframe, I realised that the market is retracing downward to retest this support level again and I intend to enter the market upon this retest.

And also, I decided to place my take profit on the resistance level I marked with an horizontal line, as that will be my first take profit but 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 could see that the market is being oversold and an oversold market is understood to signal a bullish trend reversal.

An oversold market can be detected when the rsi crosses below its 20% line and this shows the weakness of the bears and strength of the bulls in the market.

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

And as earlier stated, an oversold market is one that signals a bullish trend reversal of the market, that is, the strength of the buyers over the sellers.

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

And getting to the 2hr timeframe with my bullish bias of the market, I placed my entry on the closest support level to the market, and my take profit was placed on the resistance level I marked 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.