$ETH Evening Thoughts:
Talking through the chart: The second contract attempted to break through the triangular convergence pattern depicted in the chart this morning, but failed to do so and closed with two high-position doji candles, indicating divergence between bulls and bears at this position.
Where can you only buy and not sell? With buying, there is definitely selling. Institutional investors in the second contract are also here to make money, not just to play around, so at this position of 4349, a change of hands occurred, leading to a subsequent pullback.
Currently, the second contract has only pierced through the lower boundary of the triangle; the closing price has not settled below the triangle.
We will know whether it is a real or false breakout below the triangle once the hourly closing price at 7 o'clock is finalized. If it really breaks below the triangle, we will look at the neck line position marked below at 4161.
The second contract will only truly begin to correct if it breaks below the neck line; any rebound must not close back above the neck line, and it will continue to retest.
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The second contract should break through 4264 with volume, then chase long positions to take advantage of the rebound. If it breaks down with volume at 4244, chase short positions, and pay attention to changes in volume, ensuring to set stop losses.
The second contract should hold steady at the hourly level at 4260 and look upward to 4305-4332.
At the 4-hour level, if it breaks below 4205, look downward to 4159-4072. A break below 4159 officially starts the 4-hour correction for the second contract.
Continuing to look at the chart: If the second contract pulls back at the hourly level, first look at the Fibonacci 1:1 pullback target position of 4181. If it cannot hold, then look at the 1.618 position of 4077, and we will observe the rest as it goes. The second contract has risen from around 3300 to a maximum of 4300, gaining 1000 dollars, so it’s time for a proper correction. I would say a pullback of 500 dollars is not too much; only by squatting deep enough can one jump higher. Let’s wait quietly for the US stock market to open.
