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.