- Summary:
- Ethereum breaking higher. The double bottom's measured move suggests a minimum target above $650 and more to come if Bitcoin breaks higher too.
The crypto market suddenly woke up to life over the weekend, as major cryptocurrencies gained against the USD. Bitcoin, Ripple, Bitcoin Cash, Ethereum are just a few examples.
For the past several months, BTCUSD failed at the all-important $10,000 level. It simply lacked the energy to break higher, as each and every attempt at the level was met with selling orders. Not anymore.
Bitcoin stands comfortably above the $10,000, triggering a breakout in other cryptocurrencies. Ethereum, for instance, is one that follows the Bitcoin lead closely – and broke higher as a result.
As a decentralized system, Ethereum attracted investors from the start. Ethereum mining, faucets, staking, are just a few ways to participate in the Ethereum revolution.
Another one is to speculate on its price action. Any believer in cryptocurrencies and their role in diversifying a portfolio would be tempted to trade a break higher.
That break has come.
Ethereum Double Bottom
For over twelve months, Ethereum threatened to break the $100 to the downside. At some point, it did so, albeit for a short while.
The inability of the price to break and stay below the $100 led to subsequent bounces, directly correlated with Bitcoin attempts to break above the $10,000. However, in the meantime, Ethereum offered a return bigger than 300% to investors, while Bitcoin’s return lags.
The struggle at the $100 ended up with the price forming a double bottom. A reversal pattern, it has a measured move equal to the distance from the middle point to the $100 mark. More precisely, it resembles the W letter.
By projecting the measured move for the double bottom, the target suggests that Ethereum still has a long run ahead of it. The minimum distance for the price of Ethereum as calculated using the double bottom is $650.
A long trade at the market needs a stop-loss just below the $200. If that is the case, the $650 target provides a good-enough risk-reward ratio to make the most of this rally.
Ethereum Daily Chart
