Ethereum: Predicting ETH’s likely response to this breakout
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Ethereum [ETH] registered a double-digit loss over the last ten days after an expected pulldown from its supply zone and up-channel. The subsequent decline below the EMA ribbons has now created a relatively conducive environment for the sellers.
Should the $1,337-resistance stand sturdy, it could reject higher prices and pave the path for a slow-moving phase. At press time, ETH was trading at $1,311.5.
ETH Daily Chart
After breaking down from its ascending channel on this timeframe, the king alt reignited its bearish force. As a result, ETH lost over 30% of its value from 12-21 September while chalking out a down-channel (yellow).
The recent rebound from the $1,242-support induced a buying comeback, but faced recovery barriers near the $1,337-ceiling. A potential close above this ceiling could open gateways for a well-needed recovery in the coming sessions.
However, the recent rejection of higher prices could put the coin in a dicey situation. While the price is plateauing at the $1,337-resistance, a reversal from this level could propel a retest of the $1,280-$1,242 range.
On the other hand, an eventual break above $1,337 would hint at an entry trigger. In these circumstances, the potential targets would lie in the $1,378-$1,440 range.
Rationale
The Relative Strength Index (RSI) strived to recover beyond the 41-resistance over the last ten days. A sustained position below this level could aid the sellers in maintaining their advantage. Buyers should look for a break above the 50-mark to gauge the chances of a strong comeback.
Furthermore, the MACD continued to depict a selling edge. Even so, a potential bullish crossover in the coming sessions could rekindle some hopes for the buyers.
Conclusion
In view of the weak readings on the indicator alongside the $1,337-resistance barrier, ETH’s price action has opened up opportunities for its buyers/sellers. The targets would remain the same as discussed above.
Finally, investors/traders must watch out for Bitcoin’s [BTC] movement. This, because ETH shares an 80% 30-day correlation with the king coin.
