This development would allow Ethereum traders to bag some profits
Ethereum’s correlation volatility spread kicked in once again as the world’s largest altcoin managed to post higher percentage gains when compared to Bitcoin. Over the last 24 hours, ETH’s value rose by 4.8% as opposed to BTC’s rise marginal rise of 0.74%. The pickup allowed ETH to break north from its descending channel but gains were kept bay at the 23.6% Fibonacci Extension.
Ethereum 4-hour chart
ETH breakout above the 20-SMA (red) and upper trendline of its down-channel saw an immediate rise of 4.4% but its movement was restricted at the 23.6% Fibonacci Extension of $1,979.7. The aforementioned Fib level clashed with the 50-SMA (yellow), the 12-hour 20-SMA (not shown) and the Visible Range’s Point of Control at $1,994. Hence, an argument can be made that a close above this critical region would allow for an upwards price swing over the coming sessions.
The 200-SMA (green) rested around the $2,100-mark and could be ETH’s next destination in a bullish outcome. If prices are denied above their 23.6% Extension, prices could fall back towards $1,900 over the next 24 hours.
Since touching the oversold zone of 14 July, Relative Strength Index has been on an uptrend which was a sign of a strengthening market. Directional Movement Index saw a bullish crossover between the -DI and +DI lines as ETH broke north from its pattern.
However, an ADX reading of 20 meant that the trend was yet to solidify. Squeeze Momentum Indicator noted receding bearish pressure and eyed a rise above equilibrium for the first time in 10 days. The market was in a squeeze over the last three days according to this index and successive green bars followed by white dots would denote a ‘squeeze release’- a development that would offer buy signals for traders.
ETH’s gains were kept modest by the 23.6% Fibonacci Extension ($1,979.7) and the 4-hour 50-SMA (yellow). Momentum was yet to reach levels to back an upwards price but bulls were the ones making progress. A close above Visible Range’s POC of $1,994 could push prices towards their 200-SMA (green) before the next wave of selling pressure hits the market.