So far, the month of October has belonged to the market leaders Bitcoin and Ethereum. With the top two digital assets making inroads to new ATH’s, other coins waited in the wings to register price hikes off their own. Ethereum’s advance was in the forward direction.
A daily close above $4,000 would allow ETH to march on to newer levels after negotiating past the previous ATH at $4,380. Interestingly, RSI’s next peak along with MACD’s crossover could drop some hints as to ETH’s price trajectory. At the time of writing, ETH traded at $3,942, up by 3.5% over the last 24 hours.
ETH Daily Chart
Source: ETH/USD, TradingView
Ethereum’s bullish-bias has been discussed at length in earlier articles. Now that its head and shoulders pattern was complete, ETH awaited an upwards breakout to unlock its potential. The 123.6% and 138.2% Fibonacci levels could be potential destinations over the coming week, with the 161.8% Fibonacci level serving as more of a long-term target.
However, there were chances of some downside which stemmed from the RSI and MACD. Firstly, overbought readings on the RSI could trigger a slight retracement before ETH embarks on a more ‘organic’ run to a new ATH. Such a development would also see the RSI snap three lower peaks within the upper zone, ranging from mid-August to late-October.
This bearish divergence would not be a promising sight right before ETH challenges a crucial price barrier at $4K. Secondly, MACD was inching close to a bearish crossover while the histogram recorded two lower peaks. While these factors were certainly not enough to overturn ETH’s bullish-outlook, they could delay ETH’s ascent over the near-term.
A rejection at $4,000 would see ETH shift back to $3,680 or even $3,500. From there, the confluence of these support lines and the 20-SMA (red) would present an ideal buy entry before the next breakout attempt. On the other hand, an instant move above $4,000 was certainly a possibility as long as the RSI bests its previous peak around 75.
Such a development would see the RSI scale to new heights within overbought territory without any fears of a reversal. Moreover, two higher peaks on the Awesome Oscillator suggested that bulls were increasing their position in the market- lending weight to an immediate breakout.
Conclusion
Since the MACD and Awesome Oscillator presented a slightly different outlook, it was uncertain whether ETH would close above $4K over the coming days. The RSI could settle the ongoing debate by managing a higher peak above 75. Expect ETH to be in overdrive once bulls are able to clear this final hurdle on the RSI.
