Will Ethereum’s Consolidation End With a Breakout?

Ethereum’s Istanbul hard fork was announced in 2018 and has stirred up debates about its usefulness ever since. The upgrade went live on block 9,069,000 and made several changes to the network. While many in the network have accepted the upgrade, almost 15 percent of the nodes have not yet done so. The Ethereum price did not react to the hard fork at all. To the contrary, it has been consolidating for a long time. Market Analyst @iamcryptowolf stated that the Ethereum price has been trading inside a descending wedge for seven months and technical indicators are implying a breakout will soon occur. If so, the target is found by the 0.618 level near ₿0.05.  Will the price reach it? Continue reading below in order to find out.

Long-Term Ethereum Wedge

The logarithmic chart shows a descending wedge that has been forming since January 2018. The Ethereum price reached a low in August 2019, which was combined with an RSI low of 24. The Ethereum price is currently right at the resistance line of the wedge. However, there is ambiguity to whether you can use straight trendlines in a logarithmic chart. Therefore, we will take a look at the regular chart to see if a clear pattern emerges.

Shorter-Term Wedge

Using a regular chart, we can see another wedge that has been in development since September 2018. The Ethereum price is slightly below the resistance line of this wedge. There are two different bullish divergences in the RSI, one long- and the other short-term. Combining this with the fact that the wedge is a bullish pattern, we can assume that a breakout will eventually occur. If it does, the Ethereum price is very likely to reach a target between ₿0.0265 and ₿0.0315, a range between the 0.382 and 0.618 Fib levels. Additionally, the Ethereum price is in the process of moving above its 100-day moving average (MA). If a breakout occurs, we would see a price movement above it and the 200-day MA — combined with a possible bullish cross between the two.

Future Movement

In the short-term, Ethereum has broken out above a descending resistance line and validated it as support several times. Additionally, there is bullish divergence developing in both, suggesting that the Ethereum price will soon begin an upward move. To conclude, the Etheruem price is trading inside a descending wedge, its duration and exact pattern depending on the type of charts used. Technical indicators provide a bullish outlook in every time-frame, suggesting that the price will soon break out.