Moty Levanon
Asset: ETH/USD (Daily Chart)
While the broader crypto market is facing a wave of red today, the Ethereum daily chart is presenting a fascinating technical conflict. We are witnessing a direct collision between strong bearish momentum and a textbook harmonic completion.
For technical traders, the current price action isn't just a drop—it’s a test of one of the most reliable patterns in harmonic trading.
Below is a detailed technical review based on the Bullish Cypher pattern and Volume Profile data visible on the chart.
1. The Harmonic Setup: A Textbook Bullish Cypher
The daily chart reveals a fully completed Bullish Cypher pattern. The precision of the Fibonacci ratios in this structure is notable:
X-B Leg (The Retracement): The price executed a 0.50 (50%) retracement of the X-A leg. This is perfect for a Cypher, which typically requires a retracement between 0.382 and 0.618.
A-C Leg (The Extension): This leg broke the A high, reaching an extension of 1.34 (134%) of the X-A leg. This falls squarely within the ideal range of 1.272–1.414.
B-D Leg: The downward move from B to D extended by a ratio of 1.41.
X-D Leg (The Reversal Zone): This is the most critical data point. The pattern defines the end of the correction at the 0.78 (78.6%) retracement of the entire X-C structure.
The Level: This mathematical completion point sits exactly at $2,932.95 (marked by the dashed red line).
Current Action: The current daily candle (Tuesday the 20th) dropped to a low of $2,902.50, effectively "piercing" the Potential Reversal Zone (PRZ) to grab liquidity before attempting to stabilize around the level.
2. Volume Profile Analysis (VPVR & POC)
While the harmonic pattern suggests a reversal, the Volume Profile on the right side of the chart adds a layer of caution.
Point of Control (POC): The upper dashed red line highlights $3,022.15. This level represents the price point with the highest traded volume in the visible range.
The Implication: Currently, ETH is trading below the POC. In the short term, this is a bearish signal, as the market is trading below its "fair value." The $3,022 level has now flipped from support into immediate, heavy resistance.
Value Area: The profile shows a significant cluster of volume (long red/green bars) between $2,900 and $3,100. This indicates we are in a high-friction "war zone" where buyers and sellers are battling for control.
The Verdict: Scenarios to Watch
The market is currently caught between negative sentiment and technical support. The Bearish Reality: The daily candle is deep red (down ~6% at the time of analysis), and the psychological support of $3,000 has been broken. The Technical Opportunity: The price landed surgically on Point D of the Cypher pattern ($2,932). By the book, this is a high-probability zone for a Long entry with a favorable risk/reward ratio.
Here is how this could play out:
📈 The Bullish Scenario (The Pattern Holds) The buyers manage to absorb the selling pressure around $2,930 (Point D).
Target 1: A reclaim of the POC at $3,022.
Target 2: A Fibonacci retracement of the C-D drop, targeting the $3,200 region.
📉 The Bearish Scenario (Invalidation) If the price fails to hold and closes a daily candle decisively below Point X (the December lows, roughly $2,750–$2,770), the Cypher pattern is invalidated. At that point, the structure breaks, and the door opens for lower targets.
Disclaimer
This analysis is for educational purposes only and relies on historical data and the specific chart patterns shown. It does not constitute investment advice or a recommendation to buy or sell. Trading cryptocurrencies involves a high level of risk and may not be suitable for all investors. The author is not responsible for any financial losses incurred from the use of this information. Past performance is not indicative of future results.
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