Today we review the trend of ETH. ETH dropped from 4700 to 2600, with each rebound peak decreasing, and the downtrend is accompanied by increased volume, clearly indicating a bearish control.
However, the last wave that dropped to 2600 was different. The downtrend still saw increased volume, but the real body of the bearish candles clearly narrowed, and the lows gradually increased, indicating that the decline has clearly stalled.
With increased volume yet unable to drop further, such signals appearing in key support areas often indicate a depletion of selling pressure, so the subsequent attempts to test did not break the previous low, confirming this judgment.
However, stopping the decline does not mean an immediate surge, just as the arrival of spring does not mean one will immediately shed their down jacket. It can oscillate at the bottom to continue exploring lower levels, or it can gradually accumulate energy to form a reversal structure.
So how did it move afterwards?
After hitting 2600 for the first time, a bullish engulfing pattern appeared, and the rebound faced resistance and retraced. On December 20, it again formed a bullish engulfing pattern without breaking the previous low, marking the first bottoming signal, followed by a breakout on increased volume at the neckline.
The second bullish signal was when the lows kept rising during the retracement, indicating that the bulls were gradually regaining the initiative.
The third signal is the recent breakout of the previous high, indicating that the bottom range has already been established.
Yesterday, when it dropped a bit, many people panicked, but I clearly understand that this was just a normal retracement after hitting the pressure of the downtrend line. The overall structure shows that the lows are continuously rising, and every drop is a better entry opportunity. If one constantly fantasizes about a significant drop breaking down, they will only miss the trend.
Remember: when observing the market, look at the big picture. Don't be swayed by short-term fluctuations; if the trend is there, hold steady.
