(ETH) Ethereum / U.S. Dollar

Hi friends! Welcome to this update analysis on Ethereum! Let's get it! looking at the four hour chart, you can see that the head and shoulders formation that I gave you on the last analysis, has produced a breakdown as expected. The breakdown was sharp, and driven by high volume selling that was nearly five times the average volume . After breaking down, ETH has moved into a bear flag consolidation. The volume and momentum have died down a bit, but that is normal to see during a flag consolidation. You can see that the MACD appears to be flattening out, but we are in a bear flag consolidation, so I wouldn't necessarily view this as an impending reversal. The flag patterns in ETH have generally been very reliable, so the odds are that we will continue to see further downside action in ETH.

Now, I'm sure you've noticed my downside target, for the head and shoulders and the bear flag formation. Interestingly, the downside potential of each pattern corresponds perfectly with the 592.45 area. When multiple formations suggest price targets in the same location, it's usually an indication of fractal relationships in the patterns. In other words, when multiple patterns suggest similar price targets, it's showing you that each formation is a small piece of the whole. Think of it as a kaleidoscope. When you look into a kaleidoscope, you see a series of geometric shapes that nearly or fully represent the whole. Technical analysis is similar sometimes, in that there will be several structures that suggest a convergence on a common point. That doesn't mean that we will get there for sure. Patterns don't always correct or rally to their full potential. However, the size and location of each formation, suggests a common downside target around 592.45. A breakdown from the bear flag will further validate that downside target.