Believe it or not, Ethereum (ETH) was one of the best performing cryptocurrencies of 2019. The keyword here is was. Ethereum, at one point in June of 2019, was up +178.96% for the year. During yesterday’s sell-off, Ethereum dropped to its lowest point in six months, even moving below the January 1st, 2019 open for a short time. Currently, it is barely holding on to a positive gain for 2019 with a paltry +0.85% gain. But how long can it hold on to that? Is there any support that can be found in the near term? Let’s look.
The chart above is Ethereum’s Weekly Ichimoku chart. If you are a bull, then this should be a terrifying and ugly chart. If you are a bear, then this is one of the best charts you could ever want to see. So why is this weekly chart horrible for bulls but amazing for bears? Because it is displaying the strictest form of a bearish breakout condition on an Ichimoku chart known as an Ideal Ichimoku Bearish Breakout. The following conditions must be met for this most bearish of Ichimoku requirements to be met:Ethereum (ETH) Weekly Ichimoku Chart
- Tenkan-Sen below the Kijun-Sen.
- Future Cloud is red (Future Senkou Span A below Future Senkou Span B).
- Price below the Tenkan-Sen and Kijun-Sen.
- Price below the Cloud.
- Chikou Span below the Cloud and the candlesticks from 26-periods ago.
- Chikou Span in open space (a condition where it won’t intercept any candlesticks over the next five to ten periods).
I really can’t stress the importance of how bearish this setup is, especially when it appears on the weekly chart. When all of the conditions above have been met, it means one thing: absolutely no supportive price structure below. Zip. Zero. Zilch. The daily and weekly charts are showing extremely bearish conditions; we need to look at another, more extended time frame to get an idea if there is any support in the future. That brings us to the monthly chart.
The monthly chart above shows two things: healthy bearish continuation and evidence of how young cryptocurrencies still are. Ethereum is still so young an instrument that a Cloud on the monthly chart has only just formed. It seems funny to say this, but it will be 25 months until Ethereum will be trading at a current Cloud. But Ethereum has lasted long enough to print Senkou Span A – price is currently trading below that level. Even though there is no Cloud present on the monthly chart, we can safely assume that Ethereum would be trading below the Cloud. The monthly chart is just as ugly as the Weekly and Daily. The same conditions that exist on the Weekly Ichimoku chart exist on Ethereum’s monthly chart. There is no condition on the Monthly chart that suggests there is support in the future for Ethereum. The most bearish condition on this chart is that the Chikou Span is open space. From an Elliot Wave perspective, we are probably looking at a corrective wave that won’t resolve until leg lower resolves at C, which is near the $25 value area.Ethereum (ETH) Monthly Chart