March 22 Analysis and Price Predictions
On Mar 4, 2019, the price of Ethereum (ETH) made a low of $124. A sharp increase ensued, followed by a gradual decrease. Afterward, another sharp increase took the price above $145, before a second final downward movement began.
How low will the prices go? Can we expect a reversal soon?
In our Mar 21 analysis of ETH, we predicted that the price is likely to keep decreasing and possibly break down from the channel. Our prediction was validated later that day.
Based on today’s analysis, we predict slight price increases—which might have already begun at the time of writing.
Ethereum (ETH): Trends and Highlights for March 22, 2019
- The price of Ethereum has been on an uptrend since Mar 14.
- ETH had been trading inside an ascending channel.
- It broke down from the channel on Mar 21.
- Etherum is now trading inside a symmetrical triangle.
- There is bullish divergence developing in the RSI and the MACD.
- There are resistance areas near $153 and $145.
- There are support areas near $134 and $128.
The price of ETH on Bitfinex was analyzed at 30-minute intervals from Mar 18 to Mar 22.
On Mar 18, the price made a high of $140.91. A gradual increase ensued with each high being higher than the previous one. Tracing these highs gives us the resistance line.
The price made a low of $138.30 on Mar 18 before immediately rebounding to $139.30. Since then, a gradual uptrend followed with each low being slightly higher than the preceding one. Tracing these lows gives us an ascending support line.
The support and resistance lines combine to create an ascending channel, which is considered a neutral pattern—suggesting the equal likelihood of both price increases and decreases within the channel. However, the channel also was facing slightly upward—suggesting gradual price increases.
During this period, the price rose gradually at the rate determined by the channel until Mar 20 when price initially broke down below support. These breakdowns, however, can be considered insignificant since price rebounded into the channel immediately after.
A more significant breakdown occurred the following day. Since then, Ethereum’s price has dropped significantly below the support where it continues trading at the time of writing.
Based on this movement, the price is likely to create new areas of support and resistance.
In order to predict where price will be heading next, we analyze the price of ETH on Bitfinex was analyzed at two-hour intervals from Mar 4 to Mar 22.
On Mar 4, the price made a low of $125.88. A rapid upward move ensued. Several market cycles have been completed since, with each low being higher than the previous one. Tracing these lows gives us an ascending support line.
The support line can act as a floor to price, preventing further downward movement. It theoretically traces the lower limits of price movement.
It also measures the rate of growth. Initially, the price increased at a faster rate than predicted by the line but reverted back to the mean on Mar 15. On Mar 21, there was a second rapid upward movement. Prices have since dropped and are trading near the support.
While the price dropped below the support outlined for the period Mar 18-22, Ethereum is trading above the longer support defined for the period Mar 4-22. This suggests that the current losses may be less significant than they initially appeared.
Furthermore, it is likely that the price of ETH will keep increasing at or above the rate suggested by the Mar 4-22 support, though new short-term support and resistance levels may still be generated in the meanwhile.
On Mar 16, the price made a high of $147.5. A gradual downward move followed. Each high has been lower than the previous one. Tracing these highs gives us a descending resistance line.
Similar to the support line, the resistance line acts as a ceiling to price, preventing further upward movement.
The support and resistance lines combine to create a symmetrical triangle, which is known as a neutral pattern, making price increases and decreases equally likely within the triangle.
However, at the point of convergence between resistance and support, ETH will be forced to break out above the resistance or break down below the support.
Following the support, it appears as if a breakout is more likely. Continued gradual price increases should be expected based on this pattern. Volatility is still expected with new highs and lows being reached.
Looking Out For Divergence
Combining MACD and RSI bullish/bearish divergence with support/resistance essentially predicts price fluctuations.
The moving average convergence divergence (MACD) is a trend indicator that shows the relationship between two moving averages (long and short-term) and the price. It is used to measure the strength of a move. The relative strength index (RSI) is an indicator which calculates the size of the changes in price in order to determine oversold or overbought conditions in the market.
On Mar 21, the price made a low of $135, before rebounding and closing at $137.06. The next day, it proceeded to make a low and close at $136.55.
Similarly, the RSI and the histogram of the MACD made the first low on Mar 21. However, they proceeded to make a higher low on Mar 22.
This is known as bullish divergence and often precedes price increases.
However, it is not very significant in value and is occurring in a neutral pattern—reducing its validity. Combined with the upward support, however, price increases appear more likely.
Using these indicators, it is likely that the price experiences continued movement towards the resistance line of the triangle. A breakout is likely to occur before or at the point of convergence. However, a breakdown at the point of convergence remains possible, but such a breakdown should be followed by a reversal shortly thereafter.
The price of ETH on Bitfinex was analyzed at two-hour intervals from Feb 25 to Mar 22 to determine possible future resistance and support areas in the case of a breakout or breakdown situation.
Resistance and support areas are created when the price revisits the same level several times.
The first resistance area is located near $140, followed by the main resistance area at $145. If the price were to break out of the channel, these two would provide likely reversal areas. Further price increases could lead to prices close to $140 soon. However, a breakout would be required for the price to reach $145.
The closest support area is found near $134, with the second being found at $128. According to our analysis, it is unlikely that the price will reach this level in the near future.
Summary of Analysis
Based on this analysis, the price of ETH may increase slightly and touch the resistance line of the triangle. If the price touches the resistance line, this prediction will be partially validated. If it breaks out afterward, it will be fully validated. This prediction would be invalidated by a breakdown below the support line of the triangle.
Do you think ETH will experience significant growth? Let us know your thoughts in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.