Ethereum (ETH) has made an attempt at moving upwards past resistance, but failure caused the price to retrace almost completely.
Even though some technical indicators are bullish, a breakout from the current resistance area is required for the trend to flip bullish.
Ethereum Trading Range
The Ethereum price has been decreasing since Sept 1, when it reached a high of $489.57. The decrease continued until it reached a low of $311.04 on Sept 5. The low initiated an upward move which was relatively short-lived since ETH was rejected after reaching $394.
Currently, ETH is stuck in a range between $315-$380. A breakdown from the support area could trigger a rapid decrease towards $240, while a breakout above the resistance area would likely cause the price to move towards the 0.618 Fib level at $420.
Technical indicators provide a very mixed outlook;
- The MACD is increasing and has generated bullish divergence, but is nowhere close to positive territory
- The RSI has failed to generate bullish divergence and is trading below 50
- The stochastic oscillator has made a bullish cross and is increasing
While this might not be unusual since the price is consolidating, it shows that the daily time-frame is not sufficient in determining the direction of the next movement.
The weekly chart is still bullish, despite the bearish engulfing candlestick created during the week of Aug 31- Sept 7.
The price is still following an ascending support line and has created long lower wicks at the 0.382 Fib level of the entire increase — a sign of buying pressure.
Cryptocurrency trader @ACXTrades outlined an Ethereum chart with a short target of $333.
Since the tweet, the price has already begun to decrease and is approaching the $335 minor support area.
The decrease was preceded by bearish divergence in both the RSI and MACD.
The most likely count suggests that the price began an A-B-C corrective formation (shown in black below). with the March 3 low, and is currently in the fifth sub-wave (blue) of wave C.
Based on the length of the previous movements, the wave could end near $545.
If the count is correct, then ETH has begun a new upward move has completed waves 1 and 2 (in blue below).
A decrease below the wave 2 low of $313.29 would invalidate this particular wave count, while a decrease below the Sept 5 low of $308.42 would invalidate the bullish scenario.
An alternate wave count suggests that ETH has completed its upward move and began a bearish impulse (shown in red below) on Sept 2.
The issue with this count is that wave 5 (outlined) does not look like an impulse but rather an A-B-C formation, making this count unlikely.
The bearish count would be invalidated with an increase above the Sept 17 high of $390, while its sub-wave count would be invalidated with an increase above the Oct 1 high of $368.1.
The ETH/BTC chart shows movement relatively similar to its USD counterpart. The price has broken out from a descending resistance line in place since the Sept 1 high but failed to increase significantly after doing so.
Currently, the price is approaching the ₿0.0315 support area, with the main resistance levels being found at ₿0.0333 and ₿.036.
Technical indicators are neutral/bearish, and a bullish cross in the stochastic oscillator is seemingly getting rejected.
Therefore, there is not sufficient evidence to determine the direction of the future trend.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.