Following the strong rally in Ethereum yesterday, price action on the cryptocurrency today was a lot more subdued. The rally was mostly driven by news that the second-largest cryptocurrency in the world (by market capitalization) is getting a major upgrade. Ethereum 2.0 is said to enable the blockchain to process significantly more transactions at a faster pace. Consequently, it sparked a bullish momentum on ETHUSD.
The daily chart now reveals that a major trend line has been broken (formed when connecting the highs of September 20, November 12, and January 11). Ethereum even looks like it’s finding support at the 100 SMA.
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Looking closer at the hourly chart, ETHUSD pulled back some of its gains back to the 38.2% Fib level (when you draw the Fibonacci retracement tool from the low of January 13 to today’s Asian session high). There are already a few reversal candlesticks which may indicate that ETHUSD may soon rally. Near-term resistance seems to be around $186.26 where the 200 SMA looks to coincide with Ethereum’s highs for November 8.
However, if the rally runs out of steam and the Fib levels do not hold, ETHUSD may find support at its pre-Ethereum 2.0 announcement highs at $146.20. This area also seems to coincide with the 100 SMA and 200 SMA on the hourly chart.