People are like this: when prices are rising, they don’t believe they’ll fall; when prices are falling, they don’t dare believe they’ll rise.
Figure 1: $ETH There was heavy resistance around 2,450. If the price couldn’t break through 2,470, this rally was most likely just a bull trap—a rebound designed to lure buyers in. And sure enough, the market played out exactly that way.
Since September, I’ve repeatedly discussed ETH’s broader structure. Today, let’s go over it again.
Look at Figure 2: 1,505–2,807 was the first major weekly-scale rally in this cycle. The move that began at 2,807 is a correction of that rally. Only after the correction is complete will a new major uptrend of the same scale as the 1,505–2,807 move begin.
In early September, when I said the rally from 1,505 was nearing a top and that a correction was likely, many people couldn’t accept it.
Market sentiment was overheated then. Everyone was caught up in FOMO, waiting for ETH to surge higher, and no one wanted to admit that the rally was nearing its end.
Now the situation is reversed. I’m telling everyone that this move down from 2,807 is a correction, not the start of a new major downtrend, and many still don’t believe me.
What’s interesting is that my core view hasn’t changed since September. What’s changed is everyone’s mindset.
Once this correction has truly played out and the first 4-hour-scale rally takes shape, plenty of people will still think it’s nothing more than a rebound.
I’ve said before:
“Before a new weekly-scale trend begins, the correction will keep widening the divide in market opinion. By the time those who see 57,800 as BTC’s cycle low become a minority, even if the market starts moving up again, most people will still sell short into strength.”
We’re not at that stage yet, but I think this kind of sentiment will emerge soon.
Back to the charts (Figure 3). In the short term, keep a close eye on the 2,150–2,170 support zone for ETH.
If it holds and ETH can then stay above 2,300—the Gann 2/1 line—the correction that began at 2,807 may end with a contracting pattern or a sideways basing period.
On the other hand, if this support gives way, the price will need to move lower to find the correction low.
My view on ETH’s broader direction remains unchanged; I’ll just continue to monitor the shorter-term price action.
I’ll close with a line from “Ode to the Epang Palace”:
“The Qin people had no time to mourn themselves, so later generations mourned them; but if later generations mourn them without learning from their mistakes, they will in turn leave future generations to mourn them.”
Markets, like history, move in cycles. In every cycle, some people ignore the risks in the midst of euphoria, while others let opportunities slip away in the midst of fear.
Figure 1: $ETH There was heavy resistance around 2,450. If the price couldn’t break through 2,470, this rally was most likely just a bull trap—a rebound designed to lure buyers in. And sure enough, the market played out exactly that way.
Since September, I’ve repeatedly discussed ETH’s broader structure. Today, let’s go over it again.
Look at Figure 2: 1,505–2,807 was the first major weekly-scale rally in this cycle. The move that began at 2,807 is a correction of that rally. Only after the correction is complete will a new major uptrend of the same scale as the 1,505–2,807 move begin.
In early September, when I said the rally from 1,505 was nearing a top and that a correction was likely, many people couldn’t accept it.
Market sentiment was overheated then. Everyone was caught up in FOMO, waiting for ETH to surge higher, and no one wanted to admit that the rally was nearing its end.
Now the situation is reversed. I’m telling everyone that this move down from 2,807 is a correction, not the start of a new major downtrend, and many still don’t believe me.
What’s interesting is that my core view hasn’t changed since September. What’s changed is everyone’s mindset.
Once this correction has truly played out and the first 4-hour-scale rally takes shape, plenty of people will still think it’s nothing more than a rebound.
I’ve said before:
“Before a new weekly-scale trend begins, the correction will keep widening the divide in market opinion. By the time those who see 57,800 as BTC’s cycle low become a minority, even if the market starts moving up again, most people will still sell short into strength.”
We’re not at that stage yet, but I think this kind of sentiment will emerge soon.
Back to the charts (Figure 3). In the short term, keep a close eye on the 2,150–2,170 support zone for ETH.
If it holds and ETH can then stay above 2,300—the Gann 2/1 line—the correction that began at 2,807 may end with a contracting pattern or a sideways basing period.
On the other hand, if this support gives way, the price will need to move lower to find the correction low.
My view on ETH’s broader direction remains unchanged; I’ll just continue to monitor the shorter-term price action.
I’ll close with a line from “Ode to the Epang Palace”:
“The Qin people had no time to mourn themselves, so later generations mourned them; but if later generations mourn them without learning from their mistakes, they will in turn leave future generations to mourn them.”
Markets, like history, move in cycles. In every cycle, some people ignore the risks in the midst of euphoria, while others let opportunities slip away in the midst of fear.
