The alt has witnessed many bearish candles on intensified volumes since declining from its liquidity range around $3,100 (POC/ Point of Control). That had Ethereum poking its 6-month low on January 24. The 50-Exponential Moving Average stood as a stable resistance over the bearish phase.
Ethereum picked itself from 13-month trend-line support after considering its historical tendencies. However, the reversal rally halted near the POC. The previous month had ETH on an expected declining wedge breakout on the daily price chart.
The resultant recovery triggered a more than 23% ROI within the past 17 days while printing a climbing wedge. Meanwhile, the reversal pattern plus sturdy POC shows Ether might experience setbacks in the short term. After that, the leading altcoin may likely embark on its upward move as it broke past the critical trend-line resistance.
Reasoning
The Relative Strength Index might secure testing zones around the 57-level as it could not close beyond the 61-hurdle. The momentum maintained buyers’ favoritism regardless of a potential short-term pullback.
Bulls seemed not ready to surrender in the upcoming days as the +DI remains upward. Nevertheless, the ADX highlighted a feeble directional bias for Ethereum.
Ethereum traded at $3,138.73 at this writing. The daily chart shows ETH gained 35% from lows of $2,500. Moreover, the alt moved beyond the 50-day Exponential Moving Average at $2,846. Ethereum remains a tad beneath a crucial MA at 200EMA.
A daily close beyond the 200-Exponential Moving Average at $3,147.73 would see ETH breaking the near-term range. The leading altcoin hovers within the $3,274 – $2,500 region. Overcoming this region will see Ethereum on the hurdle at $3,600. Continued buying strength will push the leading altcoin towards the $4,000 psychological area. Though bullish, Ethereum will rely on Bitcoin’s trend. A sudden crash in BTC will ruin ETH’s optimistic target.
Final Thought
Ethereum closing beneath the $2,994 level might trigger corrections towards 20 Exponential Moving Average support. Meanwhile, the alt might continue rising on the underlying buying strength to flip the 200EMA and POC in the upcoming days. Nevertheless, market players should concentrate on BTC’s actions as Ethereum boasts a 90% monthly correlation with the bellwether cryptocurrency.
James Thompson