ETHW: Rally Into the Teeth of Resistance — Short the 0.75 Retest

Executive summary

• Market regime: Bearish. ETHW has been in a persistent downtrend since the Oct 10 breakdown, making a sequence of lower highs and lower lows on daily and intraday timeframes. The current bounce into 0.75 is corrective and occurring into layered resistance.
• Bias for next 24h: Sell rallies. Expect a retest of 0.71–0.705 with a potential intraday overshoot if 0.735 gives way. A squeeze above 0.76 would invalidate the near-term short idea and open 0.78–0.80.
• Trade idea: Short a retest of 0.75–0.756 (ideally ~0.752). Target 0.708 (prior liquidity shelf and near session S2 extension). Protective stop above 0.766 (just over 61.8% retracement and upper Bollinger on the hour).

Context and market structure

• Higher-timeframe context (daily):
  • Aug–Sep traded 1.5–1.8 with an Aug 22 blow-off to ~2.03. Since then, persistent deterioration. The Oct 10 capitulation candle (high ~1.41, low ~0.609, close ~0.903) reset the regime to high-volatility bearish.
  • The rebound into Oct 13 (~1.12) was a classic dead-cat bounce, followed by a descending sequence: 1.02 → 0.99 → 0.97 → 0.94 → 0.92 → 0.90 → 0.80 → today’s 0.705 intraday low. This staircase down confirms distribution.
  • Current price 0.745 sits well below the late-Oct value area (0.95–1.02), showing a fresh value migration lower.
• Intraday structure (hourly Nov 5):
  • Low printed ~0.705, then a corrective bounce to 0.752–0.753 and consolidation between ~0.738 and ~0.752. This is a bear flag/look-back retest into resistance.
  • Price is currently oscillating around 0.745, which coincides with multiple technical reference levels (see pivots and Fib below), suggesting this is a decision zone rather than a base.

Trend and momentum diagnostics

• Moving averages:
  • Daily: Price is below the 20D and 50D averages (qualitatively; the 20D likely in the mid/high 0.9s after the October distribution; 50D higher still). Sub-20D and sub-50D conditions typically mark a continuing downtrend. No bullish crossovers visible in recent history.
  • Hourly: Price reclaimed and is hugging the 20H SMA/EMA zone near 0.742–0.746 after tagging the lower band at 0.705. This is consistent with a countertrend bounce inside a broader downtrend.
• RSI:
  • Daily RSI has been depressed since mid-October, spending prolonged time sub-50; the recent downtick pushes it toward the 30–40 band (bearish momentum regime). No confirmed bullish divergence on daily closes.
  • Hourly RSI rebounded from oversold (~20s–30s) at the 0.705 low to the mid-40s/low-50s near 0.75. That’s corrective, not trend-shifting.
• MACD:
  • Daily MACD remains below zero and sloping down, consistent with dominant bearish momentum.
  • Hourly MACD crossed up into the bounce but is flattening below the zero line; momentum is waning into resistance.
• Stochastic (hourly): Rose to overbought on the push to ~0.752 and has begun to curl lower—typical for a bear rally approaching exhaustion.
• ADX: Rising from subdued levels as the down move extends, indicating trend strength building on the bearish side rather than choppy mean reversion.

Volatility and range analysis

• ATR (daily): Expanded materially after the Oct 10 event and remains elevated, with typical daily ranges ~0.05–0.10. Today’s intraday swing 0.705 → 0.752 fits within continued high-volatility conditions.
• Bollinger Bands (hourly):
  • Price tagged the lower band at ~0.705, reverted toward the middle band around ~0.744–0.748, and has stalled beneath the upper band (~0.755). A mid-band rejection often precedes a second-leg lower in a bear regime.

Volume/flow

• Daily volume spiked on crashes (Oct 10) and on the recent breakdown. Post-bounce, volumes are lighter and skew to supply on up-ticks (distributive profile). OBV (qualitative read) trends down since mid-October, confirming net distribution.
• Intraday, a heavier burst appeared during the 0.705→0.752 bounce, but subsequent prints are mixed/softer—suggesting short covering rather than new long sponsorship.

Key levels: support/resistance and confluence

• Horizontal supply/resistance:
  • 0.752–0.756: intraday supply shelf and hourly upper Bollinger proximity; also near 50% Fib of the most recent downswing (see below).
  • 0.78–0.80: higher resistance zone (prior breakdown area and daily acceptance in late Oct/Nov 3 close ~0.801). A reclaim would be structurally meaningful, but currently unlikely without a catalyst.
• Horizontal support:
  • 0.735–0.739: intraday shelf; loss likely accelerates to 0.71s.
  • 0.705–0.710: session low/liquidity pocket; expect responsive bids on first touch but vulnerable if momentum accelerates.
  • 0.686: daily S2 pivot projection (see below), aligns with measured move risk if 0.705 breaks.
• Fibonacci retracement (swing Nov 3 close 0.80099 → Nov 5 low 0.70551):
  • 38.2%: ~0.7420 (price hovering here)
  • 50.0%: ~0.7533 (current rally cap)
  • 61.8%: ~0.7645 (above likely squeeze line; a stop location)
• Daily floor pivots using Nov 3 H/L/C (~0.9156/0.7721/0.8010):
  • Pivot P ≈ 0.8296
  • S1 ≈ 0.7436 (today’s trade clustered at/around this)
  • S2 ≈ 0.6861 (next lower magnet on expansion)
  • R1 ≈ 0.8871 (far above; out of scope for 24h without a major squeeze)
• VWAP (session, qualitative): Price oscillated around session VWAP near mid-0.74s; failure to sustain above suggests supply capping rallies.

Patterns and measured moves

• Bear flag on the hourly: Flagpole ~0.800 → 0.705 (~0.095). Consolidation 0.738–0.752. A breakdown beneath 0.738 projects to ~0.643 on a full measured move. That extreme is unlikely in the next 24h, but it underscores risk if 0.705 fails.
• Liquidity sweep: The 0.705 print likely captured stops; the subsequent bounce did not build follow-through. This favors a second probe lower after a retest of resistance.
• Market structure: Lower-high setup into 0.75–0.756 after a lower-low at 0.705 = classic sell-the-rip configuration.

Ichimoku (qualitative read)

• Daily: Price below cloud; Tenkan < Kijun; lagging span below price: fully bearish stack.
• Hourly: Price below/inside a thin cloud; any approach into 0.75–0.756 likely coincides with Kijun/Cloud resistance, favoring rejection unless a decisive breakout occurs.

Consolidated indicator signals

• Trend: Bearish (daily and hourly) → favors shorts.
• Momentum: Daily weak; hourly bounce fading → favors shorts into resistance.
• Volatility: Elevated; range trades expand in direction of trend → favors continuation lower after corrective rallies.
• Volume/OBV: Distributive → rallies sold.
• Confluence: 0.75–0.756 contains 50% Fib, hourly upper band, and intraday supply; 0.743–0.744 coincides with S1 and mid-band; 0.705 is the obvious magnet/support below.

24-hour path expectations

• Base case (≈55%): Price retests 0.75–0.756, stalls, then fades through 0.739 to 0.712–0.708. End-of-window near 0.725–0.735 after partial mean reversion from the low.
• Bull squeeze (≈25%): Strong bid pushes through 0.756 and 0.764 (61.8% Fib). That unlocks 0.775–0.785; stretched target 0.80 if shorts panic. This requires a clear momentum expansion and sustained trade above 0.765.
• Bear acceleration (≈20%): Early failure at 0.742–0.744 leads to a direct drive through 0.735 and a swift retest of 0.705. A clean break opens 0.690–0.686 (daily S2). Overshoot risk increases late in sessions.

Risk management and execution plan

• Thesis: Short the corrective rally into stacked resistance.
• Entry: Use a sell limit around 0.752 to let price tag the 50% retracement/upper band region. If price fails to reach, an alternative is a momentum sell on a 0.739 breakdown—but the optimal R:R is the passive fill near 0.752.
• Invalidation: Close above 0.766 on the hour or a sustained hold above 0.765–0.767 (61.8% Fib and hourly upper band). That shift would increase odds of 0.78–0.80 and negate the immediate short.
• Take profit: First target 0.712–0.708 (prior low shelf), with partials on the break of 0.735 to de-risk if desired. A secondary stretch target (if momentum accelerates) sits at 0.690–0.686, but that is more aggressive for the 24h horizon.
• Risk/reward: Entry 0.752, stop 0.766 (risk 0.014), TP 0.708 (reward 0.044) ≈ 3.1:1 R:R.

Why not buy the dip here?

• The bounce has stalled at exactly the confluence area one expects a bear rally to fail (50% Fib/upper band intraday). The larger daily trend and OBV still point down. Until the market reclaims and holds above ~0.765 and especially >0.78–0.80, long setups risk being repeatedly faded.

Bottom line

• The path of least resistance remains lower over the next 24 hours. Favor selling a push into 0.75–0.756, targeting a retest of 0.71–0.708. Watch 0.765 as the invalidation pivot; above there the short thesis loses edge and 0.78–0.80 opens quickly.