Ethereum: USD/ETH (ETH=) Could End Its Seven Month Downward Trend
The Ethereum price has reached a significant resistance area, and a breakout above would mark an end to the nearly seven-month downward trend.
The price has been increasing since December 18, having done so my slightly more than 30%. Failure to break out above this resistance area would mark an end to the short-term upward move and initiate a price correction.
Technical Analyst & Chartist @TheCryptoCactus outlined the Ethereum price and stated that it has likely reached a bottom since it has turned the $142 area into strong support. While he expects strong resistance near $150, the long-term trend should be bullish.
Will Ethereum break out above $150? If so, how high will it increase? Keep reading below if you are interested in finding out.
The Ethereum price has been trading inside a descending channel since July 16, 2019. Both the resistance and support lines have been validated several times.
The resistance area outlined in the tweet is very significant but seems to be closer to $155 than $150. However, this should vary slightly from one exchange to another.
In addition to having previously acted as support, it also coincides with the 100-day moving average (MA) and the descending resistance line of the channel. A breakout above it would confirm that the downward trend throughout the descending channel has come to an end.
Ethereum Parabolic Support
Since the upward move began, the ascending support line has become parabolic, which is unsustainable in the long-run. On top of this, the price is following an ascending resistance line. Both lines will soon coincide with the $155 resistance line.
Therefore, the most likely scenario is that the price continues to increase inside this pattern until it reaches $155 and then breaks down. This scenario is supported by the growing bearish divergence in the RSI, which is visible up until the six-hour time-frame.
If the price breaks down, which seems likely, the area that is expected to provide support to the price is found at $136. Afterward, the ETH price should make another attempt at breaking out.
In our previous long-term analysis, we stated that ETH will likely be in a bullish market in 2020, a possibility that would be confirmed by a breakout above the descending channel. While this has yet to occur, we believe the price will soon break out.
To conclude, the Ethereum price has reached a significant resistance area, out of which we do not believe it will break out on the first try. To the contrary, the price is likely to decrease towards $136, before making another attempt at breaking out.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 185.34.
The projected lower bound is: 157.39.
The projected closing price is: 171.37.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.4156. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 76.75. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 249.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 22 period(s) ago.
Rex Takasugi – TD Profile
FOREX ETH= closed up 6.880 at 170.920. Volume was 75% below average (consolidating) and Bollinger Bands were 43% wider than normal.
Open High Low Close Volume___
163.980 172.100 162.590 170.920 15,236
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 146.99 139.87 184.04
Volatility: 80 63 74
Volume: 87,772 68,594 65,964
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX ETH= is currently 7.1% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume into ETH= (mildly bullish). Our trend forecasting oscillators are currently bullish on ETH= and have had this outlook for the last 9 periods. Our momentum oscillator is currently indicating that ETH= is currently in an overbought condition.