Ethereum (ETH) Holds on Above Previous All-Time High Despite Market Correction
The bullish structure for Ethereum (ETH) is still intact, suggesting that the token is still in a bullish trend.
The weekly chart for ETH is bullish despite the considerable drop on Dec 4. The main reason for this is the long lower wick (green icon), which took the price back above the $4,000 horizontal area.
This is a crucial area since it previously acted as the all-time high resistance, and has now seemingly turned to support.
So, the price action provides a bullish picture. The closest resistance area is at $6,026, created by the 1.61 external Fib retracement resistance level.
Both the RSI and the MACD histogram have generated bearish divergences (red lines). These are signs of weakness and often precede bearish trend reversals.
However, the bearish divergence is not present in the MACD signal line, nor is it in the most recent two RSI highs (green lines).
Therefore, the weekly time-frame provides a mixed outlook.
The daily chart shows that ETH bounced on an ascending support line on Dec 4 (green icon). The bounce created a very long lower wick a sign of buying pressure.
However, similarly to the weekly time-frame, technical indicators in the daily one are mixed.
The MACD, which is created by a short- and a long-term moving average (MA), is falling. However, it is still positive. This means that while the short-term MA is gradually losing speed, it is still faster than the long-term one. Furthermore, there is some hidden bullish divergence developing, which is a strong sign of trend continuation.
The RSI, which is a momentum indicator, is right at the 50 line. This is a sign of a neutral trend, since movements above/below this line are considered signs of a bullish/bearish trend.
Therefore, while technical indicators are mixed, they are slightly leaning on being bullish, and the price action is decisively bullish.
Cryptocurrency trader @Thebull_crypto outlined an ETH/BTC chart, stating that the token is breaking out in the short-term.
Since the tweet, ETH/BTC has broken out from the triangle and reached a high of ₿0.087 This is a new yearly high.
Due to the presence of the symmetrical triangle, it is likely that ETH has completed wave four of a five wave upward movement.
The most likely target for the top of the current upward movement is near 0.097. It is found using the 1.61 external Fib retracement on wave four (black) and the 0.618 length of waves 1-3 (white).
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