Ethereum
The Ethereum price rally has stalled this week as ETH grapples with the $3,000 level. But this could be the thing that sets up the next leg higher. Following the decline in July, the cryptocurrency market has experienced a lift-off reminiscent of early 2021. However, the rally has cooled in the last few days, and much of the market has traded broadly sideways. But as is often the case, periods of consolidation raise questions as to whether the price is changing direction.
Considering the Ethereum price was trading below $1,700 three weeks back, the ascent has been incredible. Furthermore, coming into this week, ETH had closed higher in 15 out of the 16 previous days. Therefore, the rally was always destined to take a break. Over the last 6 days, the Ethereum price has dipped below but never closed under $3,000. On the other hand, the price has exceeded but never closed above $3,163. WHich at some stage, should result in a breakout. However, the question is, will that send the price to another bullish extension higher, or push it below $3,000 and back to the next major support level?
The daily chart paints a very positive picture for ETH. Firstly, the price is well above the important 200-day moving average at $2,248. Furthermore, the recent price action has also cleared the 50, and 100-day averages at $2,323 and $2553.
Furthermore, the sideways action in the last week has lowered the Relative Strength Index from 80.60 to 70.68. However, this is still high, suggesting the price may consolidate further. Notably, the Ethereum price performed similarly when it cleared the previous resistance at $2,400. After punching through, ETH spent six days. Consolidating before it jumping 38% to this week’s $3,290 high. A similar occurrence here could slingshot Ethereum towards its record close at $4,198. However, this view depends on ETH maintaining the $3,000 on a closing basis. If the price loses this support, the former resistance at $2,400 becomes a viable target for the bears. That being said, I favour the former.
For more market insights, follow Elliott on Twitter.