TradeCompass: Ethereum Futures Analysis for February 5, 2025

Current Market Position for ETH Futures

Ethereum Futures is trading at $2,813 at the time of this analysis. Unlike typical TradeCompass strategies, where we turn bullish above a specific threshold and bearish below another, today’s approach involves fading the move—essentially betting on a reversal. This decision is based on higher time frame analysis, which suggests price may be contracting or forming a range.

Bearish Scenario (Short Trade Setup)

  • Short Entry: $2,913 (only after price first reaches $2,916)
  • Reasoning:
    • $2,916 aligns closely with the 2nd upper standard deviation of yesterday’s VWAP, making it a strong resistance level.
    • We wait for price to touch $2,916 first and then enter short once it moves back down to $2,913.

Bearish Profit Targets (may also apply to swing traders as it may require some patience)

  1. $2,825 (Partial Profit Target)

    • A semi-round number and close to the Value Area Low (VAL) from November 6th (actual level: $2,823).

  2. $2,766.5 (Partial Profit Target)

    • Just above today’s VWAP at the time of this analysis.
    • Also near $2,760, which is the POC from early November (either November 5th or 7th).

  3. $2,722.5 (Partial Profit Target)

    • Close to the Point of Control (POC) from February 3rd.

  4. $2,648 (Partial Profit Target)

    • Just above the VWAP from February 3rd.

  5. $2,570.5 (Final Target for Standard Bears)

    • Value Area Low (VAL) of February 3rd.
    • No additional runner targets planned.

Extended Bearish Target (For the More Patient Bearish Traders... And Believers :)

  • $2,429 (Long-Term Runner Target for Extended Sell-off)

Bullish Scenario (Long Trade Setup)

  • Long Entry: $2,565
  • Reasoning:
    • A deeper pullback to this level would warrant a short covering by enough market participants, probaby, and a short term bullish position.
    • Traders looking for confirmation can wait for price to first cross below $2,565 and then enter long only after it moves back above it. The confirmation can be based on their preferred timeframe (1-minute, 5-minute, or 15-minute).

Bullish Profit Targets

  1. $2,641 (Partial Profit Target)

    • Close to the VWAP of February 3rd.

  2. $2,689.5 (Final Target for Bullish Move)

    • No further targets identified, as a strong continuation beyond this level is uncertain given today’s market conditions.

Summary & Key Takeaways

  • Today’s TradeCompass deviates from the usual trend-following strategy, focusing instead on a fade trade approach due to broader market conditions.
  • Short Setup: We wait for $2,916, then short at $2,915, targeting levels as low as $2,570.5.
  • Long Setup: We go long only if $2,565 is reached, with moderate upside targets.
  • Traders should use these levels as a guide and apply risk management appropriately.

Trade at your own risk. Use this as an orientation, remember your stops, take partial profits when applicable and visit ForexLive.com for additional views.

Source: Forex Live