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.
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.
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 the formation of more candles as each candle here takes a trading period of 7days to be completely formed.
And looking carefully, I was able to identify another key level and this level is functioning as a resistance level to the price chart and the market is expected to be rejected whenever it trades towards this level.
And from the above screenshot, we can see that the market has made several touches on this level and has been unable to break above it which shows the validity of this level.
And then moving to the daily timeframe, I could see the market more clearly, I could see the formation of several bullish and bearish candles which shows the presence of the buyers and sellers in the market.
And looking carefully, I was able to identify another key level and this level is functioning as a support level to the price chart, and the market is expected to be rejected when it trades towards this level.
And the validity of this level can be seen from the screenshot above, as the market has made several touches on this level and has been unable to break below it.
The 4hr timeframe appears to be more noisy than other higher timeframes, and looking at it carefully, 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 could see the strength of the sellers over the buyers, as the market kept forming lower lows and lower highs.
And then, the market failed to create a new low as it traded into this support level, and from this, we can expect to see bullish rejections as the buyers takes control.
Getting to the 2hr timeframe, we can see that there are lots of noise in the market, and we can see that the market has made several touches on its support level.
And we can also see that the market is retracing to retest this support level again, and when it does, we can then place a buy order in the market.
And before then, I decided to search for confluence using the rsi 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.
Applying the rsi to the monthly timeframe, I could see that the market is being oversold, and an oversold market is understood to be a bullish trend reversal.
And an oversold market can be detected when the rsi crosses below its 20% line, and this can indicate a change in market strength from the sellers to the buyers.
I then decided to add the rsi to the daily timeframe and here I could see that the market is being oversold and this signals a bullish trend reversal of the market.
An oversold market is a market condition that signals the weakness of the bears and the strength of the bulls in the market, and then I moved to the 2hr timeframe in search of entry into the market.
And then I moved to the 2hr timeframe with my bullish bias of the market having had several confluences to my analysis.
And then I decided to place my buy entry on the closest support level to the price chart and my take profit was placed on the closest resistance level to the market price just as seen above.
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.
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