Ethereum (ETH) has just completed a weekly bearish cycle that started in May. The cycle comprised of 9 red candles as can be seen on the ETH/BTC chart above. The last time this happened, we found the next few weeks to be green. Before, the correction when Ethereum (ETH) completed 9 red candles, we saw a big run up to its all time high against Bitcoin (BTC). Ethereum (ETH) is once again in a similar position it is poised to break out of its downtrend resistance in the next few weeks.
RSI for ETH/BTC has reached critical levels. This means that Ethereum (ETH) is now at a decision point where it has to either break above or below the triangle in which its RSI is trading. Since the RSI is just above 40, it is likely that it will most likely break out to the upside which will manifest itself in the form of big green candles on the ETH/BTC chart. This would coincide with general market sentiment that the next rally is going to be an altcoin rally. Previously, when rumors of a Bitcoin ETF put sell pressure on most altcoins, Ethereum (ETH) took a hit and the price was at risk of breaking its support line. However, after SEC’s rejection of the Winklevoss Twins’ Bitcoin (BTC) ETF, investors have once again started loading up on altcoins. Positive prospects for Ethereum (ETH) against Bitcoin (BTC) gives investors hope that a big run up in most medium to small cap coins is to be expected in the months ahead.
Ethereum (ETH) being the largest platform cryptocurrency is seen as an altcoin leader. Favorable price movement for ETH/BTC has a positive impact on other medium to small cap coins. Ethereum (ETH) was recently cleared by the SEC as not a security which is a big development that has yet to translate in favorable price action. As the market is generally in a correction, investors did not react extraordinarily to this development but investors that are looking to buy for long term would now be certainly a lot more comfortable holding Ethereum (ETH) or Ethereum Classic (ETC) as they have been specifically cleared by the SEC as non securities.
Ethereum (ETH) has yet to reach the bottom of its ascending channel against US Dolalr (USD) as can be seen on the ETH/USD chart above. RSI conditions look favorable for a run up whereas MACD conditions show that there is little room for further downside and a reversal should be expected in the weeks ahead. It is pertinent to note that most technical indicators have reached oversold or exhausted conditions and a trend reversal at this point will most likely be a very aggressive and consistent one. This means that it is plausible to assume that Ethereum (ETH) can still mark new highs for the year as cryptocurrencies other than Bitcoin (BTC) usually have their biggest rallies in the last few months of the year.