On Mar 4, 2019, the price of Ethereum (ETH) made a low of $124 and rose to highs of nearly $145 within two days.
Since that time, greater highs of over $147 were reached on Mar 16. Lows have stayed well above the $124 mark, before a drop to around $135 on Mar 21.
Though prices initially rose back to over $140, they were trading near $136 at the time of writing on Mar 25.
Should we expect further drops or will prices finally reach the $150 mark again?
Based on today’s analysis, we predict that the prices of ethers—the native cryptocurrency deployed on the Ethereum network—will increase and eventually break out of the current trading pattern defined below.
Will it reach $150? You’ll have to keep reading to find out.
Ethereum (ETH): Trends and Highlights for March 25, 2019
- The price of Ethereum has been on an uptrend since Mar 4.
- It is 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.
In order to predict where the price will be heading next, we analyze the price of ETH on Bitfinex was analyzed at two-hour intervals from Mar 4 to Mar 25.
On Mar 4, the price made a low of $125.88. Rapid increases followed. 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. However, price reverted back to the mean on Mar 22 and Mar 24.
It is likely that the price of ETH will keep increasing at the rate suggested by the Mar 4-22 support.
On Mar 16, the price made a high of $147.5. A gradual downward move followed. Several market cycles have been completed and 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. This is a netural trading pattern. Price increases and decreases are likely to continue within the triangle’s confines.
However, at the point of convergence between resistance and support, Ethereum 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.
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 22, the price made a low of $136.15. It revisited the same level on Mar 25.
Similarly, the RSI and the MACD made the first low on Mar 22. However, they proceeded to make a higher low on Mar 25. The level of divergence is more pronounced in the MACD.
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, price increases, however, still appear mlikely.
Using these indicators, it is likely that the price experiences continued movement towards the resistance line of the triangle and eventually break out. While a breakdown is still possible, we believe it to be unlikely.
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 triangle, these two would provide likely reversal areas. Further price increases or a failed breakout could lead to prices close to $140 soon. However, a confirmed 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 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 eventually break out of the triangle? 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.