Altcoins strike back

The Market Tale (Sep 18, 2019)

Bull is excited about ETH breaking $200

“So this happened!” said Bull, eager that he didn’t close his long position after previous conversation.

“Pretty strong indeed” agreed Bear. He got stopped out twice: on the break of $200, and recently on the break of $215. “I thought $200 level would be retested. But no, we’re pushing higher.”

“The retest may come later” the Bull decided to comfort his friend — they both had warm feelings towards each other, despite often having the opposite views on the market.

“We’re still in the resistance band below $237” mentioned Bear. But even he was reluctant to short again after two failures in a row.

The 195–237 resistance band that Bear is talking about

“Why are you placing the lines like this? And why are you talking about “resistance band” instead of “resistance level”?”.

“Because resistance is formed by people who bought within previous price range. They are scared by the recent drop, so they want to get out at breakeven. But the breakeven price is different for everybody — some bought at the top, some bought at the bottom. Different entry price means different breakeven price, which, in aggregate, forms a multiprice resistance band, not a single price level.”

“I see,” remarked Bull. “But isn’t it good that we’ve pushed into resistance so far?”

“It is. Those people who sold at breakeven — they will enter the market again at a higher price if the uptrend continues.”

“That’s funny.”

“But you know what?” said Bear after switching to a daily chart, “On a high timeframe, this is all just a low-volume pullback.”