Range Bound to Trending Market

Let us continue to follow up on the ETH market and see what happened to the range bound market from yesterday. After yesterday's writing ETH began to rally in the evening session of United States trading hours. It dropped all the way down to the support level at 1210. If you bought there, its a great buy! As ETH promptly rallied all the way to 1310 level at resistance. See, TA works! It does have predictive power (sometimes!). But really the prediction is not important. In my mind, it is a bunch of if-else statements.

Lets see what happens to the beginner trader who bought ETH at 1210. If he/she had a sell order at 1310, that is done! Trade finished! Congratulations! You have made $100 in profit by putting in $1210. That is 8% return in approximately 6 hours! For most people that's an excellent trade.

What Next?

The thing about crypto is that it always trades. So we can follow up what is happening to the ETH market next. As ETH tried to break the Resistance, there is a thing happened which is called 'fake-out' or it is also called a bull trap. I have it circled in yellow. What it means that it is a failed attempt to break the resistance. Price fell back, however, it didn't go all the way to the bottom. When this happens and it creates a higher low, the market changes from range-bound to trending.

Higher lows and higher highs are characteristics of a trending market. Right around 6 am in the morning, the price broke above 1310 resistance and thereby confirming the new trend. We can draw the trendline easily by connecting the lows. Now this trendline will also be a support. The 1310 - 1210 range is now extended. The market will be now either trending, or will generate a higher range or Range Extension. We will trade accordingly.

Happy Trading.

Disclaimer: This is NOT professional advice, this is all just my own opinion and experience. I am NOT a Certified Financial Adviser. Consult professionals for any financial, accounting or legal related questions you have.

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