Ethereum (ETH) is primed for further gains soon as we have a break out of the symmetrical triangle that it is trading in. The 4H chart for ETH/USD shows the price trading near the top of the triangle just below the 50 EMA. If it succeeds in breaking out, we might be looking at a retest of the 200 moving average which could push the price close to $170 where it might face some temporary resistance. Over the past few days, Ethereum (ETH) has been preparing itself for a breakout although it seems to have practically done nothing. The RSI has now cooled off and so has the Stochastic indicator on the 4H time frame. In other words, ETH/USD is now ready for its next potential rally. However, whether or not this rally comes into effect will depend largely on how the EUR/USD forex pair trades starting next week.
Major investors in this market look up to the stock market and the forex market to determine whether it is going to be a good idea to stay in cryptocurrencies or not because they understand the risks. Unlike mainstream cryptocurrency investors that FOMO into the market, they do not make decisions based on emotions but on what lies ahead and how the cryptocurrency market would be affected in case of a correction in the S&P 500 (SPX) or in the EUR/USD forex pair. These are important considerations for big money in this market because these larger markets have been known to influence the cryptocurrency market for the most part. This is why it is always a good idea to wait and see what the near-term outlook of those markets is. While Ethereum (ETH) may still rally near term, whether or not that rally is sustainable will depend on those macro factors.
The daily chart for ETH/BTC shows us how the rice is still struggling to break past the 38.2% fib extension level. There is a good chance that it might end up rallying from here to test the 200 day moving average because it seems extremely unlikely for Ethereum (ETH) to begin another downtrend against Bitcoin (BTC) without testing the 200 day moving average. The price has now broken past a key fib circle and will now have to test the next one.
Ethereum (ETH) like the rest of the altcoin market stands to lose a lot more if the market begins to tumble from there. Even though we have been calling for a correction to the upside near term after the brutal downtrend, it is very important to realize that if the stock market starts to decline or the strength of the US Dollar goes up, then it would be very hard for the cryptocurrency market to stand its ground. It is therefore important not to get caught up in temporary market developments and focus on the big picture here. Traders should realize that Ethereum (ETH) is still in a bear market and therefore any bullish positions at this point need to be approached with extreme caution.