On Sunday Ethereum price ramped up an amazing 12%+ upside move. Does this mean Feb 5th drop to $100 was the 2019 bottom for Ethereum?
Ethereum Price: Market Overview
On Sunday Ethereum (ETH) 00 shifted into beast mode and steamrolled past the $125 and $130 resistance levels and onto new monthly highs. Analysts will probably spend the first few hours of the day trying to explain away what could have fueled such a spectacular move.
Perhaps it was ETH Denver?
Maybe its hype building up to Constantinople 2.0 and the 3rd’ning fast approaching on February 25 – 27?
Possibly ETH bottomed when it touched $80 on December 15 and $100 on February 5th?
Alternatively, it’s possible that bulls are just chasing the money and throwing dosh at whatever chart has the most pleasing technical setup. Regardless of the reason, it’s good to see green on the charts and like a pimply lad at Freshers week, any action is welcome in this bearish environment.
Let’s check the charts and try to break down what happened.
On Sunday Ethereum price topped out at $137.48 which represents about a 12.5% move and the supposed king of altcoins also managed to cross above the 200MA for the first time in months. Moreover, the 50 MA and 200MA also crossed and for the first time in a while.
ETH is looking better situated on the daily chart but a move above $158 is required to set a more convincing higher high on the weekly chart. Nonetheless, the convergence of these longer-term moving averages could mark a positive turn of events for Ethereum and the altcoin’s mild divergence from BTC price action is also encouraging in the same way that LTC was the lead bull over the past two weeks.
At the moment it appears that ETH needs to take a breather and recuperate as the current really looks extended with the RSI and Stoch in overbought territory. There’s a clear bullish cross on the MACD and over the past 24-hours trading volume leaped 25% to a daily volume of $3.5 billion. Even though ETH price looks set to pull back a bit it is well above the bullish trendline with support near $125.
ETH-USD Longs Chart
ETH-USD Longs Chart
ETH-USD Longs have reached a new all-time high compared ETH-USD shorts, which are now below their December 2018 low and it seems ETH is trying to set up for a longer play at $145 to $163 followed by $180.
While all that is fantastically exciting, we all know by now that any sharp downward move from BTC can wreck the party and quickly bring ETH back to 2018 and 2019 lows. So while the technical setup looks attractive, traders must look beyond the ETH chart on the hourly, 4hr, daily and weekly and consider BTC-USD and BTC-ETH price action before making any long plays on the ETH-USD pair.
At the time of publishing, it is a bit too early to tell if Ethereum price is entering consolidation on the hourly chart but traders can watch for a bounce at $132 and depending on the technical setup a purchase at $130 – $133 with sell stop order $1 to $2 dollars below purchase price might allow on to catch the next wave if ETH decided to march toward $140 and above.
More conservative traders can wait to see how ETH reacts as it tests its underlying supports. The altcoin appears well supported above $120 and the most immediate supports are $132, $125, $123, $120.
As always, trade safely my friends!
What do you think ETH will do this week? All comments are welcome!
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Images courtesy of Shutterstock, Trading View. Market data sourced from Bitfinex and Kraken.