Ethereum Head and Shoulders Could Lead to Further Losses

All eyes have been on Bitcoin in recent weeks as it continues to consolidate. Ethereum prices have practically mirrored what its big brother has done and analysts have eyed a clear head and shoulders pattern which could lead to further declines.
Ethereum made it back over $260 a few hours ago but has started to fall back again during today’s Asian trading session. The 1.5 percent slide has taken ETH back around $255 which is still higher than it has been for most of the past week.
According to Coinmarketcap.com Ethereum did drop below $230 briefly on Monday when crypto markets saw red. For the past few weeks however ETH has been range bound, trading between $230 and $270, largely following the movements of Bitcoin which has been hovering just below $8k.
Ethereum Head and Shoulders Pattern Clear
As usual the analysts have been eyeing the charts looking for patterns and one has depicted the clear formation of a head and shoulders.
“Forgive my drawing skills, but this is a classic Head and Shoulders pattern. Now, patterns can fail, but this gives you an idea of what I am thinking and what will negate it.”

$ETH Daily Chart
Forgive my drawing skills, but this is a classic Head and Shoulders pattern. Now, patterns can fail, but this gives you an idea of what I am thinking and what will negate it.#ETH pic.twitter.com/O7UguanTpR
— CryptoFibonacci (@CryptoFib) June 14, 2019

The pattern is a classic bearish reversal which usually leads to further declines below the neckline, currently at around $230 which is also the bottom of the recent Ethereum trading range. ‘CryptoFibonacci’ has also noted a classic volume decline which usually accompanies this pattern. Since the beginning of the month ETH volume has declined from over $13 billion down to $8 billion where it currently remains.
A break above $275 and retest of $280 could negate the pattern but that is only likely to happen if Bitcoin can break $8,200 and hold above it.
Not all are bearish though, full time crypto trader and analyst ‘Financial Survivalism’ has depicted a bull flag and early signs of a parabola instead of the head and shoulders;

This $ETH chart is why I am wiring money to @Gemini tomorrow morning pic.twitter.com/bvll97g52F
— Financial Survivalism (@Sawcruhteez) June 14, 2019

Most are in agreement that, like Bitcoin, any short term declines will lead to further accumulation which is likely to drive a bigger run in the coming months. Ethereum back over $300 is not too far-fetched looking at recent performance.
Fundamentally, the phased Serenity upgrade is still several months away. The first phase, Beacon Chain, will manage the Casper Proof of Stake protocol for itself and all of the shard chains. This is expected to be launched later this year according to the Ethereum roadmap.
In the short term ETH could fall back to $200 if the head and shoulders pattern plays out but longer term gains are virtually guaranteed. At the time of writing Ethereum was trading at $255, down 1.5 percent on the day.
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Contrarian Bitcoin Upsets Bearish Investors, But Massive Head and Shoulders Still in Play

In the early hours of the morning, Bitcoin exploded upward to $8,000 from a double-bottom local low set over the weekend around $7,500. The rally upset overly bearish crypto investors and traders who had been expecting further downside in the price of the first ever cryptocurrency.
The brief, yet powerful green candle may have shocked bears, an ominous and massive head and shoulders has been forming on the price charts of Bitcoin and other leading crypto assets, suggesting that the bears may soon have their party, and the crypto market may see a sharp drop lower if the formation is completed and confirms.
Bears in Disbelief: Bitcoin Rallies From Local Low in Surprise Move
Oftentimes, the best move for investors is to take a contrarian stance from the rest of the market. Much like calls for million-dollar BTC were signals the last bull market top was in, calls for sub-$1,000 Bitcoin was equally exuberant.
Related Reading | Peter Brandt Bearish After Bitcoin Breaks Bullish Trend, Expects Further Reversal 
But it’s when the majority of the market is expecting it to trend in a specific direction, more often than not the market moves in the opposite direction.

when bears get cocky and my feed is 80% filled with 6k calls things like this happen.$btc pic.twitter.com/l8UiVc4MID
— BenjaminBlunts (@SmartContracter) June 10, 2019

After over 100% growth in just two months and a broken parabolic rally, the entire crypto market is anticipating a significant drop in Bitcoin – with many calling for targets of $6,000 and lower.

Nice 6% pump by $BTC
Sentiment was a little too bearish after that weekly close
Even I expected further downside
Range remains the same and would like to see a daily close above $8200 pic.twitter.com/z4HONOT4HJ
— Josh Rager (@Josh_Rager) June 10, 2019

The overly bearish expectations come after last night’s weekly candle close, which many claim is a bearish reversal signal painted on weekly price charts. 

The calls for $6,000 were quite preemptive as Bitcoin hasn’t yet broken below $7,400. In fact, a poll posted just moments before the sudden surge heavily skewed toward $7,200 over $8,000 as Bitcoin’s next target. The votes have since evened out as the poll is still live, and not even an hour after the poll was posted, Bitcoin had already touched $8,000.
Staring in the Eyes of Massive Crypto Market Head and Shoulders Formation
Bitcoin bulls may have bested the bears once again, if a massive head and shoulders that is forming on the price charts of Bitcoin and other major cryptocurrencies plays out, bears will soon be having a parade at the expensive of the bulls.

So NOW we gettin a head and shoulders…. pic.twitter.com/G9DkWxNHG7
— dave the wave (@davthewave) June 10, 2019

The powerful bearish reversal pattern began at the start of May when Bitcoin breached resistance at $6,000. A quick rise to around $8,200 happened, before the leading crypto by market flashed crashed forming the left shoulder.

pic.twitter.com/ahm0XixgcO
— Peter Brandt (@PeterLBrandt) June 9, 2019

The surprisingly resilient crypto asset, then bounced back to over $9,100 before a violent rejection put the entire two-month rally in jeopardy.

$BTC Daily Chart.
Heading, no pun intended, into the right shoulder of the Head and Shoulders pattern should happen soon. After that, all bets are off. Could still take a week or so to develop. Expecting choppy higher prices this week. Proceed with caution.#BTC pic.twitter.com/9Z7lZoRhtP
— CryptoFibonacci (@CryptoFib) June 10, 2019

After falling to local lows below $7,500, Bitcoin has now revisited above $8,000 twice, signaling that the bulls are still putting up a fight – however, a break above $8,200 is required for the enormous reversal pattern to be invalidated.
Featured image from Shutterstock
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