The Ethereum/US Dollar pair (ETH/USD) launched its bull run on November 23, 2017 when it broke out of $400 resistance. With a solid base between $200 – $400, the market skyrocketed to as high as $1,419.96 on January 13, 2018. In less than two months, the pair grew by almost 255%. Those who bought the breakout and followed the trend were happy to take profits.
Faced with heavy selling pressure, the market dropped to $757 on January 17. Bottom pickers bought the dip but the rally they inspired could only carry the market to $1,224 on January 28. The lower high was a clear signal that the bull run was over. Market participants responded by taking profits or cutting their losses. As a result, the market created a series of lower highs and lower lows until recent price action.
Technical analysis show that Ethereum/US Dollar appears to be bottoming out at $400 support. This comes after the pair may have capitulated on March 18 when it printed over 375% of its average daily volume. In addition, volume also spiked on March 29 and March 30 when the pair went below $400 support. This suggests that bulls are coming out to buy the support.
The strategy is to buy as close to $400 as possible. If bulls defend the support, they will create a base before moving to our target of $620. Sell immediately once target is hit because the pair will most likely range trade to repair its technical damage. The process may take a month.
Daily Chart of ETH/USD on Coinbase
As of this writing, the Ethereum/US Dollar pair is trading at $421.44 on Coinbase.
Summary of Strategy
Buy: As close to $400 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.