It’s futile to talk about the global cryptocurrency’s market current bull run without mentioning Ethereum. The world’s largest altcoin has seen a weekly surge of nearly 30% which actually sit slightly higher than Bitcoin’s percentage gains. However, ETH prices were still within the confines of a down-channel after a wider market correction stalled its northbound push. At the time of writing, ETH traded at $2,270, down by 3% over the last 24 hours.
Ethereum Daily Chart
Source: ETH/USD, TradingView
Since May 19, ETH has consistently made lower highs and lows which eventually led to the formation of a down-channel. Despite ETH rebounding from $1,700 on several occasions, gains have been restricted below the upper trendline and sellers have responded at various resistance levels.
ETH’s 100% extension of its 22nd June low now rested around the $2,400 and clashed with the upper boundary of ETH’s pattern. Hence, an argument can be made that a successful close above this level would initiate an extended rally in the market.
$2,600 incoming?
Fiboancci Extension tool highlighted a couple of potential targets in case ETH breaks north of $2,600. The 127.2% Extension rested at $2,620 while the 161.8% Extension lay at $2,866. These areas were also largely in focus once bulls attempted various recoveries post the 19 May market decline. On the other hand, a minor dip can be countered between $2,100 and $2,160- an area bolstered by the 200-SMA (green).
Reasoning
The Relative Strength Index successfully climbed above 50-55 for the first time in over two months as buying pressure returned to the market. The Aroon up maintained close to 100% and indicated a strong uptrend. The Squeeze Momentum Indicator also eyed a move above the half-line, something that would denote a further increase in buying pressure.
Conclusion
ETH eyed a key breakout in the coming days to extend its current rally. A move above $2,400 would highlight its next target levels that lay at $2,600 and $2,800. Meanwhile, traders can wait for a breakout confirmation and long ETH once prices close above $2,400 to capitalize on this projected rise.
