Along with Bitcoin the chart of Ethereum dipped about 48 hours ago from now. While Bitcoin broke shortly through the $9000 level, Ethereum was on its way to $300. Many analysts and traders declared already two weeks ago that the Altcoin season was open. Right now people sound a bit less optimistic with Ethereum’s price currently declining by roughly 10%. Depending, on the exchange to about $230 – 240. So where is Ethereum heading?
We can assume that Ethereum has bottomed out at around $80 and that is currently retracing to its former highs. The next big level for Ethereum is not the $300 level but the $400 level where ETH would reach the 0.236 Fibonacci level – red line (fig. 1). So basically, the fundamental technical outlook looks positive for Ethereum. However, on its way to retracement Ethereum is moving in an uptrend channel that looks as follows:
It is absolutely possible that the price of Ethereum could retest the bottom of this uptrend channel. However, this is a mid-term possibility and it will correlate with Bitcoin’s further price action. In the case of bearish movement the 100 MA serves as a strong support that could correlate with the bottom of the uptrend channel.
Currently, it looks like Ethereum is forming a bull pennant. A bullish signal in an uptrend that you can recognise simply by the chart forming higher lows while respecting the resistance level. It is the same pattern that we saw some a bit more than a week ago now on the Bitcoin chart. We analyzed this pattern and made the statement that you should watch the lows. Bitcoin continued to perform higher lows and consequentially broke the resistance. Chances are high that Ethereum will do the same soon. However, all Altcoins depend on Bitcoin’s movements. Therefore, a look at the BTC/ETH chart is mandatory.
The reason why many people called the start of the altcoin season two weeks ago was that on the charts of many Altcoins to BTC, a golden cross appeared. Bitcoin’s price rose and the Altcoins followed consequentially as seen many times before. In Ethereum the chart did not react to this right away but in the midst of May Ethereum broke out in the ETH – BTC chart. The decline does not mean that Ethereum’s rally has now failed. On the contrary, it was just the first attempt of a rally and it is likely that more will follow. Even if Bitcoin were to start a correction now, we are very close to a strong bottom (0.0025) in the ETH – BTC channel.
A Bitcoin analysis will follow as soon as possible to compliment the statements made here.
DISCLAIMER: This is no financial advice. The statements here serve only educational purposes. DYOR