Ethereum has experienced a slight rebound this week rising 18% from the monthly low of $450 seen on the 13th of June. Ethereum is currently trading hands at $531 per token with a 3.90% price increase from 24 hours ago.
This rebound comes after a tough 30 days for Ethereum as prices drop a total of 23% over the trading period. Price action was trading well below the monthly high seen at $628 early during June.
This recent Ethereum bounce comes off the back of an announcement made by the SEC (Securities and Exchanges Commission) that Bitcoin and Ethereum will not be regarded as securities. This opens the route for a potential for futures trading to eventually be enabled for ETH as has already been seen with Bitcoin.
Let us analyse price action for Ethereum against the USD over the long term.
ETH/USD – LONG TERM – DAILY CHART
Looking a price from a long term perspective, we can see that the market has been trading for the majority of the year within the confines of a loose symmetrical triangle.
Ethereum had experienced a significant price increase from November 2017 to January 2018, as prices rose from a low of of $293 to an all time high placed on January 13th at a price of $1424.
Since this all time high price action has depreciated and had retraced just past the .886 Fibonacci Retracement priced at $412 in April. This is a Fibonacci Retracement taken from the bullish run seen from November to January. Price action then went on to make another bullish run during April as price rose to +$800.
During May price action began to depreciate and has fallen just past the .786 Fibonacci Retracement at a price of $527. Price is currently finding resistance at this .786 retracement level.
If price action can break and hold above $527 it is clear then to test the upper boundary of the long term triangle which should also coincides with the major $600 psychological level. A break of the triangle should take Ethereum past the current monthly highs placed at $628.
Alternatively, if price action fails to break above the .786 Fibonacci Retracement then we could see price action falling toward the lower boundary of the symmetrical triangle.
Let us examine price action a little closer over the more recent period.
ETH/USD – SHORT TERM – DAILY CHARTS
Examining the market from a closer distance, we can see that price action has recently, on the 13th of June, found support at the short term .786 Fibonacci Retracement level at a price of $461 (marked in black). This is a short term retracement of the bullish run seen during the month of April.
Price action has since bounced and currently has found resistance at the .618 Fibonacci Retracement at a price level of $542. This area of resistance if also strongly reinforced by the long term .786 Fibonacci Retracement located at $527.
If price action can break and hold above the $542 price handle, we could expect the bulls to make a push at the upper boundary of the triangle whilst also meeting resistance at $600. This $600 price handle also has strong resistance due to the .50 Fibonacci Retracement being located at $599.
Following a break of $600, Ethereum is then free to tackle further resistance located at the .382 Fibonacci Retracement level priced at $656.
Alternatively, if the resistance from the short term .618 Fibonacci Retracement proves too strong for the bulls, the market could roll over and head toward the .786 Fibonacci Retracement at $461, once again.
The technical indicators are beginning to show promising signs for the bulls within the market. The RSI has battled its way from oversold conditions to the 50 handle where it currently meets some resistance. If RSI can break above 50, this would indicate that the bullish momentum within the market is beginning to increase.
To add to this, the 7 day EMA (blue line) has recently turned around is pointing in the upward direction. If this moving average can then go on to cross above the 21 day EMA (purple line) this would indicate that the bullish momentum is considerably growing within the market.
Let us examine how Ethereum has been trading against Bitcoin over the course of the past trading year.
ETH/BTC. – LONG TERM – DAILY CHART
Looking at the chart above, we can see that Ethereum has been struggling over the course of this year against Bitcoin. Price is down by 35% from the all time high placed on February 1st at a price of 0.1230 as it currently trades hands at 0.07920.
We can see that after the all time high, price action depreciated all the way past the .618 Fibonacci Retracement of the bullish move, at a price of 0.06164. Since this low price action has rebounded and is currently trading above the .50 Fibonacci Retracement at 0.073362.
We can also notice that price action has recently broken above a long term downward trend line over the past 24 hours which we will examine a little more closely below.
ETH/BTC – SHORT TERM – DAILY CHARTS
Looking at Ethereum against Bitcoin over the past few months we can see the break of the downward trend line more clearly. The recent bullish momentum allowed for price action to spike above the line.
Price action had declined up to the .382 Fibonacci Retracement of the bullish run seen in April at a price of 0.073481 where it found a significant level of support. After this price action continued to trade underneath the descending trend line until the break occurred today.
If the market can close the trading day above this trend line then this may signal a short term bullish shift in sentiment for Ethereum against Bitcoin. If price action can continue and close above 0.08000 then it is free to attempt to retest the highs seen during last month at 0.08576.
The technical indicators are showing promise for the bulls within this market. The RSI is trading above the 50 handle and is steadily heading higher, indicating the increasing bullish momentum within the market. To add further to this, the 7 day EMA and the 21 day EMA are trading very close to each other and look ready to cross up above one another which would add to the confirmation that the bullish momentum is increasing within the market.
The recent recovery within the Ethereum market has caused a significant break of a technical trend line relative to Bitcoin. This could be the initial catalyst needed to create a long term change in sentiment for Ethereum against Bitcoin.
Traders should eye the $600 price handle as the next major price to hurdle before a more sustained price increase can be achieved.