$ETH Weekly Case Study: Raindrop Charts®, Anchored Accumulation/Distribution, Seasonality, and Fibonacci Extensions
Using a mix of technical indicators as well as non-technical indicators can help market participants get an edge in the markets. Using TrendSpider, we go over the different ways technical indicators such as Raindrop charts and “anchored accumulation/distribution” as well as non-technical indicators such as historical seasonality, can help get a full perspective on the financial markets.
Ethereum Weekly Raindrop Chart
This is a weekly Raindrop chart of Ethereum over the last 18 months using both technical and non-technical tools on the TrendSpider platform to get a full perspective into the market. This case study focuses on visualizing supply and demand within the candlestick using Raindrop charts as well as looking at volume flow each quarter using the “quarter to date” anchored accumulation/distribution indicator. This case study also touches on using historical seasonality for Ethereum as well as how to identify measured moves for Fibonacci extensions.
- This number shows the measured move for the 1.618 Fibonacci extension which is now a price level to watch above as the ascending triangle breaks out. The measured move here is simply looking at the previous all-time high and connecting it with the July 2021 lows. This measured move produces an extension above around $6,000. This 1.618 extension is being used because there is no previous price action at this price level to look for possible pivots above, meaning you cannot “look left” for levels of interest.
- This number shows the current weekly raindrop candle which highlights a breakout of the ascending triangle resistance as well as volume occurring at the top of the week’s range. The raindrop candle allows users to see the volume profile within the weekly candle’s price range. Whenever there is volume at the top of the range, it suggests conviction by buyers willing to absorb any supply being dumped on the market near the weekly highs. This is the type of raindrop you want to see for a continuation up through the breakout level.
- This number shows the “quarter to date” anchored accumulation/distribution indicator which shows a change from negative to positive (red to green) right at the reversal point in the trend before hitting all-time highs. This indicator can be very useful for spotting reversals and money flow into the next bear or bull trend. Notice this indicator continues to hit higher highs as the price also hits higher highs which has led to further increases in price in the past.
- This number shows the monthly historical seasonality for Ethereum over the last 5 years which shows December having an 80% win rate. This means that over the last 5 years, December’s monthly close has been higher than November’s monthly close 80% of the time. This is very interesting to see both the technical and non-technical indicators aligning into the end of 2021.
We hope that this case study helps to show how striking a good balance between “clean” charting and a few useful indicators can help you to improve your overall trading performance by providing more insight into price direction and trend than price alone can offer. Why not try out some of these indicators along with the many others available on TrendSpider for 7-days free with this special offer.