Ethereum (ETH) Consolidates Above Local Bottom Before Next Decisive Move

Ethereum (ETH) Consolidates Above Local Bottom Before Next Decisive Move

Ethereum (ETH) was trading in a tight range since December of last year but for the past few weeks, the price has been consolidating above a local bottom with no clear direction. The 4H chart for ETH/USD shows that the price is very unlikely to break below $115. The most probable scenario after weeks of consolidation would be to expect Ethereum (ETH) to resume its rally towards $160. If the price continues to remain range bound between $160 and $115, it could ultimately culminate in a strong breakout to the upside as a bull flag is formed. RSI for the 4H chart shows that there is significant room for a rally to the upside. If Bitcoin (BTC) had a clear direction the past few weeks, we would have seen ETH/USD break out decisively either to the upside or to the downside.

The price does not have strong support below $115 and should it break to the downside, it will be in complete free fall until it reaches a price of $86.50. The daily trading volume has significantly dried up which means there is a risk of a strong move in the days ahead. Under existing circumstances, this move has a higher probability of being to the upside than to the downside. That being said, the volume is so low that a few big players could manipulate the price either way before an actual direction is determined. There have been some instances of manipulation in the recent past that may not have impacted the price as desired but they were orchestrated attempts nonetheless. Most recent of such incidents was news regarding a Binance KYC hack.

Before the Binance hack news, we had Ethereum (ETH) specific news regarding the Constantinople upgrade. In the last few days, there have been plenty of posts published regarding how Ethereum (ETH) has failed and why it may not rise to its previous all-time high anytime soon. When the whole market is bleeding red, it gives opportunities to people to fulfill their specific agendas. So for instance, someone is Bitcoin (BTC) maximalists and comes gun blazing at Ethereum (ETH). There may be others that want Ripple (XRP) to succeed so they come attack Ethereum (ETH). Some may not like cryptocurrencies at all and would take this opportunity to tell people why they think Ethereum (ETH) is going to zero. The point is, when the market is trading below median and acting in an unreasonable manner, it is easy to find people that are emotional for their own reasons. The key to success in any market is to stop chasing the price and let it come to you.

If we look at the weekly chart for ETH/BTC, we can see that it already completed two cycles before, once during 2017 and 2018 and then again during 2018 and 2019. Both of these times Ethereum (ETH) rallied against Bitcoin (BTC), topped out and then declined to find a bottom. Ethereum (ETH) is once again on the verge of beginning the same cycle that it did during 2017. The price will trade sideways for a long time but then suddenly it is going to make a few quick moves to the upside during which time it will reach an all-time high. By then it might be too late to be feel bullish which is why it is wise to be fearful when others are greedy and be greedy when others are fearful.

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