Sentiment: Bearish

Previous Week Analysis:

I had a terrible trading performance last week, and I know exactly why—it was because I stubbornly followed my gut instinct with my emotions, which was a mistake. For the past two months, I’ve been consistently updating my weekly technical analysis and market forecasts. Here’s what I’ve learned from this process:

1. Technical analysis is crucial.

2. My ability to analyze the market is improving.

3. The market is constantly changing, and even the best analysis can be wrong. However, as long as the scope is well-defined and covers as many possibilities as possible, technical analysis remains valuable.

4. Even with a solid weekly technical analysis, that doesn’t guarantee I’ll make the right decisions at the right moments as an intraday trader—especially when I fail to stick to my own day trading rules.

Trading is not easy. Being a successful intraday trader requires not only strong technical analysis skills but also a disciplined mindset, emotional control, and precise position sizing. It’s a long journey to becoming a consistently profitable trader, but I’m on my way!

Weekly Chart:

Over the past several weeks, the market has shown signs of transitioning from a broader bull channel to a trading range (TR). With this week's close, the market structure has become slightly clearer—it is either forming a trading range or a converging triangle within the bull channel.

From a weekly chart perspective, the market made a lower high and a lower low this week. Although it closed above the previous week's open, a closer look at the daily and 5-minute charts reveals that this was primarily due to the long tail formed on Monday, while Friday ended with a bearish bar.

The red bottom resistance (higher low) and the blue resistance (lower high) are likely shaping a converging triangle. Since the price did not close at the lower end of the triangle, there is still room for further downside movement. However, unless there is a strong bearish breakout below the 5800 support level, the broader trend remains bullish.

Trading Strategy from a weekly perspective:

• the market closed in the upper third of the range, suggesting a potential move down toward the 5800 level, where strong buying interest is likely to emerge.

• However, caution is needed, as the premarket action could already price in this expectation by dropping directly to 5800, similar to last week.

Daily Chart

Two of the three RTH gaps formed last week were unexpectedly filled before Monday's open. As analyzed a week ago, the anticipated third push never materialized. Instead, a significant bearish gap formed before the market opened. Despite this major gap down, the market responded bullishly. Although it struggled to push the price back to all-time highs (ATH), the bulls still delivered an impressive performance.

As outlined in the weekly analysis, the presence of a higher low (HL) and a lower high (LH) suggests the potential for further downside movement following Friday’s close, with a target around 5800. Friday’s high (LH) at 6147.75 will act as key resistance, which bulls may attempt to retest next week. If there is no breakout (BO) or strong continuation, the trading range (TR) or converging triangle structure will remain valid, and bearish momentum could persist.

Trading Strategy from a Daily Chart Perspective:

• Continuously monitor ETH/RTH price action to see if it surpasses 6147.75 and assess whether the breakout is sustainable.

• If a strong bearish trend emerges, consider taking short positions with a target around 5800.

5 Mins Chart

Last week, the market was clearly in a bull channel, likely forming the first leg of a bearish move within a larger trading range (TR). I only recognized this in hindsight, which contributed to my poor trading performance. After two pushes up, the market formed a lower high(on higher timeframes, e.g. hourly or daily charts), 5 mins charts also included a micro double top for more precise setup. Following this, the market collapsed, breaking below the channel line and retesting it once.

Given the strong bullish momentum over the past several months, there is still a chance that the market could reverse back into the channel. However, the higher probability scenario suggests that the second leg of the TR is beginning, meaning next week is likely to develop into either a bear channel or a strong bearish trend.

Trading Strategy from the 5-Minute Chart:

1. Monitor the premarket action on Monday to determine the initial market positioning.

2. Key resistance at 6100: Unless the price reclaims 6100(back to the bull channel), the likelihood of a move down to test the gap around 5953 remains high. If the market does regain 6100 and holds above it, the TR or converging triangle narrative becomes invalid, and there would be a strong chance of a new ATH, either in a flattening bull channel or with a breakout (BO) into a new bull trend.

3. Support at 5953: If the price falls below 5953, the next major support would be around 5800, which aligns with the bottom of the converging triangle.