Ethereum: What Should You Know for Profitable Trading?
Ethereum / TetherUS BINANCE:ETHUSDT
The price couldn’t stay above 2000$ and we got the reversal with the further correction movement. The price broke SMA20 and tried to move below SMA50 as well. What’s next?
If we draw support lines using the previous important swing highs, we will get 2 support zones that should be used for planning our trades.
The 1st support is formed by 1440$ and 1280$ levels – the previous ATH and another important swing high from the past. We can see how this support stopped the downward movement after SMA50 breakout. The price bounced from this support and moved above SMA50. RSI and MACD histogram confirmed the price reversal. It gave us good bullish setups in the daily and hourly timeframes with the targets at 2000$ resistance for swing trades and 3000$, 5000$ targets for position trades. If the price bounces from SMA20 and moves back to SMA50 and this support, we should expect a new reversal with new trade opportunities.
What if the price breaks the 1st support?
If the price can move below 1280$, the road to the 2nd support zone and SM A200 will be opened. The 2nd support zone is based on 1000$ round number and important swing highs from the past as well. SMA200 is a good target for the bears when the price breaks SMA50.
If the price reaches this support and we will get new bullish signals, it will be the best trade opportunity. This support zone is also supported by the Fib level from the weekly timeframe , and we combine 1000$, SMA200, with the Fib level, we will get the most solid support. The question is, will the price reach 1000$ again? Share your thoughts in the comments below.
Even if the price reaches SMA200, we will have reasons to talk about the bullish markets in the long run. But the breakout below SMA200 will give us a trend reversal. Don’t forget about such an option. At the beginning of 2018, the crypto market made new highs, and a lot of traders were sure that the bullish trend would be continued. But we know now that they were wrong. The same situation we can have in 2021. Plan your trades, taking into consideration not only the bullish model but what will you do if the market becomes bearish .
How I trade in this market:
– Ethereum is the main part of my trading portfolio
– I use swing and position trading strategies
– I started building long positions from 1700$, and the main part of active positions are at 1350$-1400$
– I placed pending orders for buying at 1050$ – 850$
– I invest in this market up to 30% of the whole capital
– If the price moves below SMA200, I will close the part of long positions and open new positions with better prices for the long run
– Another 30-50% of the capital will be used for new trades in order to make the average price profitable even in the bearish market.
And what is your plan for this market?
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
Source: TW DLavrov