Ethereum (ETH) Could See A Sharp Retracement Before A Bullish Continuation 

Ethereum (ETH) has been on a roll the past few days. We stated in our last analysis on ETH/USD that the price might end up shooting towards $300. While that could still happen, we can now see on the 4H chart for ETH/USD that it has run into a strong resistance. Normally, we would call this a double top and expect a trend reversal from here. However, considering the manner in which Ethereum (ETH) has rallied, this could shape up to be a major ascending triangle that could lead to a breakout in the weeks ahead. At this point, it does not seem very likely that the price may rally further from here without seeing a sharp pullback to the trend line support. 

The recent parabolic run up in Ethereum (ETH) has been very impressive but it is important to realize that all of this is staged. This is not real buying interest. This is why I remain long term bearish on Ethereum (ETH) and other altcoins because I think they have yet to see maximum pain. That being said, the halving FOMO is not going to subside just yet. We are going to see another rally in this market and I am convinced that we could see ETH/USD break past $300 before halving. However, please note that the price could fall even more aggressively than it rallies. Bulls may go up the stairs but bears can go out the window and that is usually what happens after such parabolic rallies because they are not sustainable. 

The daily chart for Ethereum dominance (ETH.D) shows how aggressively Ethereum (ETH) has been rallying compared to the rest of the market recently. Certainly, this kind of growth is not sustainable and it is not likely to end well. That being said, this is Ethereum dominance (ETH.D) we are looking at. There are other altcoins like NEO (NEO), Cosomos (ATOM) and Cardano (ADA) that have yet to rally as aggressively which means that we could see those coins rally against Ethereum (ETH) during the next move up. 

The cryptocurrency market rallied quite aggressively yesterday as Gold (XAU/USD) shot past $1,600/ounce. We have previously seen Bitcoin (BTC) and other cryptocurrencies rally at times of a rally in Gold but we have yet to see a proper correlation between the two. In my opinion, this correlation is completely staged. This whole idea of trying to project cryptocurrencies as safe haven assets is flawed on so many levels. A more reliable correlation is the one between this market and the stock market. We have seen many instances of that and that is what we ought to rely on. While this market may have room to rally further, it is important to realize that when the S&P 500 (SPX) begins its next downtrend, we should brace for impact in this market.