Below I will briefly explain these concepts and what this potentially means for Ethereum .
Orderblocks are small (usually square shaped) that precede major market moves, market analysists mark these Orderblocks (OB’S) on their charts in hopes that when price revisits these levels in the future a strong reaction will occur.
A Orderblock is a form of Support or Resistance. (Either or both depending on where it is located)
When price revisits the same area in succession and increases in value with each consecutive touch a “Support Area” can be formed, other analysts and traders may be looking to purchase at these areas in anticipation of higher prices.
When price revisits the same area in succession and decreases in value with each consecutive touch a “Resistance Area” can be formed, other analysts and traders may be looking to sell assets at these areas in anticipation of lower prices.
Support & Resistance Flips
Notice on the ETH/USDT chart we were previously above the Daily Orderblock for a Extended period of time (marked with White Tick) now we are back underneath this area (marked with White X), that means that in this example the previous area of Support created by the Orderblock has now flipped into the current area of Resistance.
These “flips” can also occur in the opposite direction with price pushing up against a defined Resistance Area, which then flips to Support.
The more touches over time on the same area, the weaker it becomes.
By using this simple method we can clearly see ETH/USDT is showing weakness here and lower prices are possible (although not 100% guaranteed).
The invalidation (an opposing scenario which would completely negate this idea) would be as follows:
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