Hey guys,

We’ve woken up to another crypto sea of red, with a major Ethereum dump in the headlines. I know I said I’m replacing my ETH analysis with that of EOS, but in this case they’ve crossed over.

The Ethereum dump was most pronounced on Bitfinex so all of the charts and analysis are done off that exchange. Take a look at the 15 minute below to see the carnage that the dump caused:

ETH/USD 15 Minute

But what caused the dump? Well our mate WhalePanda had one theory which seems to have gotten some legs.

Take a look at his Tweet screenshotted below:

With EOS running their ICO on Ethereum for he last year and accumulating ETH to fund their launch, it should come as no surprise to the market that this ETH is going to get dumped. The questions have always been how much will they dump and how quickly will they dump it?

Well it seems we have an answer to those questions now: A lot and relentlessly.

HOWEVER. I’m all about highlighting how structured the seemingly unstructured, emotional dumps are and this is just another prime example of why trading technicals works.

So a large order of ETH was dumped at market and continued selling snowballed from there. But look at where price found support on the daily:

ETH/USD Daily

Yep, right in that beautifully clear daily support zone. Look how many touches we’ve had there dating all the way back to before the huge run at the end of 2017.

I’ve added the same chart just zoomed in below to highlight the most recent price action which I’ve derived the level off of:

ETH/USD Daily Zoomed

You can see that price didn’t actually drop irrationally on emotion after all. It stopped right in the daily support zone on our chart and was actually a highly technical, structured move.

So with price holding higher time frame support and bouncing out of it, we as always step down into the intraday charts to look for short term pullbacks as entries.

I like the hourly charts but it’s all the same really:

ETH/USD Hourly

Take advantage of these sorts of setups when they present themselves. There’s most likely a 1:3 to be found on this first bounce.

Will this be the scenario to play out?

✌🏻.

Return from Ethereum Dumps on Bitfinex. But as Always, There’s Structure in the Madness to forexbrokr's Web3 Blog