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Since the low of 11.21 at 2623.57 to the high of 12.11 at 3447.44, ETH is now at a very critical position.
Referring back to the wave on 12.24, I mentioned that BTC was a false breakdown, and ETH's movement was actually synchronized with BTC. Currently, ETH is very likely undergoing a sideways adjustment, but how can we find good entry points during this process?
I looked at the charts and identified two more probable scenarios—
**First**: ETH remains sideways here, and during the adjustment, the real body of the candlestick must not break below 2888.7. After reaching the limit, it suddenly breaks out and rises. In this case, there is hope to re-stand above 3447.44 by mid to late January.
**Second**: The rally starting from 2775.19 is actually just a rebound within this range. After the rebound, it continues to decline, and only after finding a bottom of the correction does a new upward wave begin.
What is the biggest difference between these two scenarios? If the first scenario occurs, the adjustment will end relatively quickly. If you haven't found a good entry point, you'll miss the entire move later. The second scenario involves a few more days of adjustment, and once a bottom is found, there will still be a wave of gains to participate in.
**My trading approach is this**: I will continue to observe, looking for signals of stopping during small retracements, then gradually try long positions. The stop-loss is set near today’s starting point at 2889. Don’t worry about hitting the stop; keep looking for opportunities to try. This is the cost of riding a big rally.
If the recent decline is quite sharp and there are no clear signs of stopping at 2889, or even if 2780 cannot hold, then it might be heading into the second scenario. At this point, I will keep a close eye on the market. Once there are signs of stopping, I will try again, but the stop-loss may need to be loosened a bit, starting with the previous low near 2623.57. If the market develops as expected, I will gradually move the stop-loss up to the recent low, and once it returns above the cost basis, I can continue holding.