ETH is at a resistance level of $2100, which is a make or break level. If it breaks this, we are heading up. If it’s rejected, we might test the bottom again the third time.

- Market structure: Market structure is bearish on ETH until the $2100 level is not broken. ETH has been printing LH’s and LL’s. At the mentioned resistance level, we anticipate a rejection, which will be aligned with other factors.

- Trendline: A descending trendline is in formation, which might be tested or broken at the resistance level of $2100. If we see a rejection of candles, printing a pinbar or engulfing, then we will have an additional confirmation to go short on this.

- Retracement: The golden retracement level of 75-78.6% is in confluence with the resistance area. This area is a strong level given ETH is in a bearish trend. With the confirmations of resistance and trendline retest, this will be our third confirmation to go short.

- EMA's: EMA’s present a different picture in this pair. EMA 200 has tested the prices earlier in the bullish direction. EMA 50 is bearish and might conjunct with the resistance area. If this happens, we will have a 4th confirmation of our technical analysis.

- RSI/CCI: It needs to be noted that both oscillators had a bullish divergence formed earlier, to which ETH reacted and is now heading towards the resistance. The divergence has been factored in this surge up. On the bearish side, RSI is below 50 and CCI is in negative below 0. Both represent bearish pressure in the market.

As a conclusion, shorting ETH is a high probability setup based on technical analysis. The only problem is, cryptocurrency is highly speculative right now. Because of this, we witness a lot of parabolic moves and spikes. If the resistance is breached, shorting ETH is invalidated.

Ethereum at an important level

Jul 24 2021