Ethereum (ETH) bounced at a confluence of support levels on Sept. 22, potentially signaling the end of a month-long correction.
Since the Ethereum Merge went live on Sept. 15, options traders have had a bullish outlook for the future price. This can be clearly seen by the call options volume, which has climbed to more than $3.5 million as of Monday. This is a more than threefold increase since the $1 million lows of March.
The bullish sentiment is also visible in the put/call ratio, which is currently at 0.23. This means that for each dollar that options traders have placed in an ETH put, there are more than $4 (1/0.23) placed in a call.
ETH breakout on the horizon?
ETH has been decreasing inside a descending parallel channel since reaching a high of $2,030 on Aug. 14. Such channels usually contain corrective movements, meaning that an eventual breakout from it would be expected.
On Sept. 21, ETH reached a low of $1,220 and bounced. This movement served to validate the $1,250 horizontal support area and the support line of the channel. Moreover, it gave waves A:C an exactly 1:1 ratio. As a result, it is very likely that the correction is complete.
A breakout from the channel would confirm this while a decrease below the $1,220 lows would invalidate this scenario.
Rate of increase could gain pace
The six-hour chart aligns with this reading. It shows that ETH is in the process of breaking out from a descending resistance line which had been in place since Sept. 17.
The upward movement began after the six-hour RSI generated bullish divergence (green line). Now, the indicator is in the process of moving above 50. If it is successful in doing so and the price reaches a close above the resistance line, it would confirm that a bullish reversal has begun.
In that case, the main resistance area would be at $1,440. If ETH is successful in moving above it, the rate of increase could greatly accelerate.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.