Last week, we talked about the digital currency markets, which were experiencing similar troubles to those of the overall stock market.
At the time, we said that the ETH futures (ETH) market was in an up channel on the daily time frame, with the market moving from the top of the channel towards the bottom of the channel.
The market was showing signs of stabilizing, and we were simply waiting for a counter trend line break before considering an entry.
Here’s what the chart looked like back on May 4…
Where We Came From
As you can see in the daily chart below, ETH was at the bottom of its short-term up channel.
But it was still below its counter trend line, so we were sitting on the sidelines and waiting for that line to be broken.
We said it would be a good idea to stay out of this market until the daily time frame breaks above the short-term down trend line, which would have provided confirmation of a market U-turn.
Where We Are Now
Fast-forward to today, and the digital currency markets are trading sharply lower.
For one thing, this shows why it’s always better to wait for confirmation of a U-turn rather than jumping right into the market at a low price.
As you can see in the current ETH daily chart, the counter trend line break never happened, and price fell down to the bottom of the longer-term channel.
This level was also shown in the first chart above, so it was always a possibility that it could be hit.
At this point, you can see that the ETH market is at another known level of U-turn, but we’re largely in the same boat as we were last week…
That is, the market is at a low price, but we will need to see a counter trend line break to the upside and a confirmation of the U-turn before we enter into this market again.
However, if confirmation does occur, the daily future resistance level at 5,101.50 could represent a big upside opportunity.
The Bottom Line
Every week, we cover the ETH and BTC markets as well as the major stock markets inside of my entry level futures trading service, Futures War Room.
For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.
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Keep on trading,
P.S. I have been teaching more and more traders how to make their own trading accounts work so well that they can effectively become a side job with plenty of regular earning opportunities. And in particular, learn how this is really working with digital currencies such as ETH & BTC!
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