Ethereum (ETH) recently had its highest weekly gain of 2018 just last week after sinking to $85 — a price level not seen since May of 2017.
ETH fell hard since reaching an all-time high of $1,400 in January of this year, losing a total 94 percent in less than a year’s time.
Investors were eager to jump in at sub-$100 levels and caused a quick bounce from $85 all the way up to $163 before beginning to retrace this week. Ethereum is currently trading at $126 and is ranked second with a total market cap of nearly $13.1 billion.
Relative Strength Index (RSI)
Looking at the daily relative strength index (RSI), Ethereum is sitting just below the descending resistance. This past year ETH has not been able to escape this resistance and considering the state of the rest of the cryptocurrency market, it is likely that the price will come back down to consolidate.
If Ethereum continues to keep following this wedge pattern, the next stop down on the RSI scale should be in the range of 36 to 40.
Using the 4-hour Ichimoku Cloud indicator can help to determine possible areas of support and resistance in some scenarios.
In the past weeks, a strong positive trend allowed the value of ETH to shoot off above the cloud after a bullish crossover. This week has seen a slow correction which appears to be leading the value back to the cloud and should land somewhere in the range of 0.0315 BTC/ETH and 0.032 BTC/ETH.
The Cool Down
Using the Fibonacci retrace indicator and the assumption that ETH would double bottom and bounce at 0.024 BTC at the beginning of December, BeInCrypto predicted Ethereum’s next move to the 0.236 Fibonacci level.
This target was just shy of being hit this past Monday and has since begun to tip over. Taking into consideration the massive descending trend line, the sinking RSI, and the position of the Ichimoku Cloud, it is likely that Ethereum needs some time to recharge a bit before another surge can take place.Traders looking to take a position should allow some time for the dust to settle after gaining almost 100 percent in two weeks. Click To Tweet
Ethereum has not yet escaped the clutches of the downward trend that the price has been on for the entire year, and there is no guarantee that $85 was the bottom.
If the $85 support fails to keep the price afloat, Ethereum could possibly see the $50 level sometime in the first quarter of 2019.
Was Ethereum’s latest surge just a fluke? Will 2019 be a recovery year for Ethereum? Let us know your thoughts in the comments below!
Images courtesy of TradingView.
Disclaimer: The contents of this article are not intended as financial advice, and should not be taken as such. BeInCrypto and the author are not responsible for any financial gains or losses made after reading this article. Readers are always encouraged to do their own research before investing in cryptocurrency, as the market is particularly volatile. The author of this article does not hold ETH.