Why This Ethereum Support Area Could Determine The Future Trend

Ethereum (ETH) Price Highlights

• There is support at ₿0.0255 & ₿0.0247.
• There is resistance at ₿0.034.
• The Ethereum price is trading inside a symmetrical triangle.
• It is facing resistance from the 200-hour moving average (MA).
• The long-term outlook is bullish & the short-term outlook is bearish.

YouTuber, investor, and trader @QuintenFrancois tweeted an Ethereum chart that shows that the price has moved above several significant moving averages (MAs). He believes the upward move will continue but did not give any targets for the ensuing upward movement.

$ETH also looks prime for continuation vs $BTC.

Retested previous resistance as support. Still waiting for a more convincing bounce though.

Unleash the BEAST pls @VitalikButerin pic.twitter.com/4LIqyd41p7

— Young And Investing (@QuintenFrancois) March 3, 2020

Let’s take a closer look at the Ethereum price movement and determine where it is heading to next. Note: This article will only deal with the ETH/BTC pair. For the ETH/USD analysis, click here.

Double Bottom

The first thing to note should be the long-term chart — even with last week’s decrease is extremely bullish. The Ethereum price created the bullish reversal pattern known as a double bottom that was combined with a strong bullish divergence in the RSI. Afterward, it began a strong upward move and broke out above the main resistance area at ₿0.0255. The aforementioned decrease only served to validate this area as support. As long as the price stays above it, the Ethereum trend is considered bullish and a movement towards ₿0.034 is expected.

Daily Ethereum Chart

The daily chart is also bullish but raises some concerns. On a positive note, a bullish cross between the 50- and 200-day moving averages (MAs) has transpired on February 14. However, the price is quite above these MAs. Also, there is virtually zero support all the way down, so a price decrease below the minor support provided by the wicks at ₿0.0247 could trigger a sharp drop. The main reason for the concern comes from the lack of strong bounce once the Ethereum price reached the support area. As evidenced by the horizontal blue lines, the close on the second bounce was lower on the first one — indicative of weakness. A daily close below ₿0.0254 (second line) would be a definitive sign of weakness, suggesting that the price will break down below ₿0.0247.

Short-Term Bearishness

The short-term outlook aligns with the daily chart. The Ethereum price is trading inside a symmetrical triangle, which is considered a continuation pattern. The resistance of the triangle coincided with the 0.618 Fib level, making this a retracement rather than a reversal. Also, the RSI has been rejected thrice at the 50 level. The hourly chart gives a similar view. The Ethereum price was rejected at the range high and the 200-hour moving average. Therefore, a price decrease towards the range lows at ₿0.025 is expected. The reaction once the price gets there will be helpful in determining if the price will move upwards afterward. To conclude, the Ethereum price has completed a bullish reversal pattern and broken out above a significant resistance area. However, it has been showing some signs of weakness in the short-term, which suggests the price will decrease to ₿0.025.