Ethereum: The road to reclaiming the $3,200-level starts with….
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The London upgrade is finally live. While it is still too early to ascertain the events’ impact on the crypto’s prices, ETH has been steadily climbing the charts lately. Its break above $2,640 was an important development, but was this really a turning point for the world’s largest altcoin?
According to its daily chart, a certain level still needs to be toppled to back a bullish mid-long term narrative.
Ethereum Daily Chart
ETH’s upper sloping trendline extended from the 19 May decline and highlighted the formation of lower highs. The turning point came when ETH rose above this trendline on 26 July, something that allowed the price to snap away from its downtrend. Higher peaks soon followed which affirmed a strengthening market.
The next target for ETH now lay at its 26 May high of $2,915. A successful close above this region would heighten chances of recovery towards the neckline of ETH’s head and shoulders pattern at $3,200. On the other hand, a lower high formed below $2,440 could negate chances of a favorable outcome.
The Relative Strength Index formed two peaks in the overbought territory over the last few days. This resulted in a bit of bearish divergence with respect to ETH’s price action. Positives came from the Awesome Oscillator which highlighted upwards pressure in the market and the DMI which solidified ETH’s uptrend.
If the RSI’s divergence does come into play, ETH will be set for a retracement over the next 24 hours. The recently flipped resistance zone of $2,540-$2,640 could then provide support to ETH and prevent a fall below $2,440.
Ethereum can find a resting ground between $2,540-$2,640 before resuming its hike towards the $3,200 mark. However, traders must be on the lookout for a move below $2,440 as this would invalidate a bullish thesis.