Ethereum (ETHUSD) - Inverted Cup & Handle Pattern Forming - Bearish

Hey guys,

Seeing chart patterns and understanding how they operate can help you determine when to enter at a good price. On the recent Ethereum chart we're seeing an inverted cup and handle pattern forming. This is a bearish sign.

Take a look at the chart below:

There are two important "lines" we're going to use with this pattern. Line "A" is our rim support. It's drawn from the rim of the cup. The closer the price of the rim is on each side the better the formation. As we can see this price is very very close. This line will extend out into the future and will be a good trend line to cross into a potential bullish breakout.

Line "B" is another trend line. It's signaling that the bearish pattern is forming. When line "B" crosses line "A" this is a sign that the price is going to continue trending down. If you are looking for a SHORT opportunity then this would be something you would want to carefully watch.

If you're looking for a LONG(or bullish) position then you will want to wait for the downtrend to finish and for the price to cross back ABOVE line "A".

Now, there is no magical formula for how long this will take. It could take a few trading days, a week or a month. Looking at the past we can see the price in Ethereum had a nice steady increase for quite some time. This could be the natural leveling out period where the security starts to trade at a steady channel until forming another uptrend or it could be a temporary dip before another uptrend occurs.

Another tip: If you see the price bounce off this line "A" a few more times then this would be a nice support level for future trading.

Remember, always have an exit strategy(stop loss) in play and make sure you aren't risking any money you can't afford to lose. Nothing is guaranteed - don't buy in on just one indicator - and make sure you are doing your own due diligence to ensure as minimal risk as possible.

Thanks for reading and good luck!