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Ethereum (ETH/USD) statistical and technical analysis

Most cryptocurrencies began their recent decline after Wednesday´s FOMC meeting (we should be ready to raise rates relatively soon). Ethereum fell the most of the major cryptocurrencies. The current price of Ethereum / U.S. Dollar is 3 100 (January 09, 2021). Let’s now look at statistical and technical analysis.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 3.74% and -3.46% , respectively. The estimated daily return in both directions based on their probability of occurrence is 1.95% and -1.66% . Yesterday’s return was -3.17% , which is below the first standard deviation. Our scoring is currently very negative (-3 ) for the month-on-month change and -2 for price indexation. Both scorings range from -3 up to 3 , which means that we estimate a very negative declining phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.

ETH/USD daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. As we can see in the chart below, all ETH/USD MAs currently support bearish sentiment. In the case of growth, the annual MA may be the price resistance.

ETH/USD daily price development Source: WALFIR

Since the creation of the last historical maximum, we have witnessed more declining trends, with the maximum level reaching 4 consecutive days, which is also the maximum in the measured period. The upward trends in recent weeks have not exceeded more than 3 days. The maximum for the last 3 years is 8 days. We could use the average long-term ATR (Average True Range) obtained from daily data (7.65% ) to estimate Stop Loss orders for our positions. The current value is 4.45% , which is below average. Approximately 90% confidence interval (return between -7.70% and 8.80% ) is shown in the histogram below by a red rectangle.

ETH/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (13.50% ) to estimate Profit Targets, as shown in the chart below.

ETH/USD daily low to high distribution Source: WALFIR

After a dynamic decline in early December, basic technical analysis still supports short-term bearish sentiment as the market price creates lower low and lower highs. ETH/USD is currently very close to the psychological level of 3 000 and the level of Fibonacci retracement 38.20% . The price is also below short-term and long-term MAs. Recently entered the demand zone (green rectangle), where is also the level of Fibonacci retracement 50.00% at the bottom. However, we can clearly see a bullish divergence between price development and the RSI. Therefore, we can expect a small stabilization in the zone before any dynamic movement.

ETH/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...


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