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Black Friday Rally to $170 for Ether? — Here’s What Must Happen


cointelegraph.com 2019-11-29 16:00
Reading time: ~4 m

Earlier this week Ethereum’s token Ether (ETH) took a serious tumble as Bitcoin (BTC) price swiftly broke down to $6,560 on Nov. 25. The price dropped through numerous supports, forming a bottom at $131.60, a point not seen since March 25. 

As one would expect, Bitcoin’s drop to $6,560 quickly led the crypto market to become oversold and a strong relief rally took place with many altcoins. Bitcoin eventually followed with a 3-day $1,000 recovery, which brought the price as high as $7,600 on Nov. 27. 

Bitcoin’s inability to stay above $7,600 and possibly muted trading from United States’ traders enjoying the Thanksgiving holiday has meant Ether spent the last 24-hours trading between $150.75 to $153.68. 

Normally a cool-off period would be expected following an 18.41% gain but Ether’s current positioning on the ETH/USD daily chart suggests more gains could be in store. 

Crypto market weekly performance

Crypto market weekly performance. Source: Coin360

Indicators flip bullish but volume is needed

At the time of writing, the daily RSI is climbing toward 38 and the MACD line of the moving average convergence divergence oscillator (MACD) is rising up toward the signal line. The current uptrend on the histogram also suggests the Ether’s price action is about to shift. 

ETH USD MACD, RSI, Stoch

ETH USD MACD, RSI, Stoch. Source: TradingView

The MACD is designed to highlight changes in strength, direction, momentum and the duration of a trend in an asset’s price and this is typically how crypto-traders utilize the tool. 

While it's not a tell-all-be-all oscillator that can be relied on as a solitary tool, it is useful for observing trend changes when combined with other oscillators like the relative strength index (RSI), Stochastic RSI and trading volume. 

In the current scenario, aggressive traders will view the MACD line rising toward the signal line as an early indicator of purchasing interest returning to Ether. Risk-averse traders will wait to see if the MACD line crosses above the signal line, or above 0 and if the histogram flips from negative to positive by crossing above 0 and turning green. 

The MACD is a lagging indicator that trails an asset’s price action whereas the oscillators like the RSI and Stochastic RSI are leading indicators. 

Traders will notice that the lines of the Stoch RSI have already crossed into bullish territory. What is needed at this point is an increase in buy volume from the bulls. 

ETH USD 6-hour chart

ETH USD 6-hour chart. Source: TradingView

Little resistance after $155

As shown by the 6-hour timeframe, Ether price is pinched between the 12 and 26-point exponential moving average (EMA) with support at $150. Ether’s rapid decline on Nov. 25 pulled the price below a number of supports that have previously served as reliable bounce points. 

If Ether can pull above the volume profile visible range (VPVR) node at $155.27, there is little overhead selling pressure until $171.30 and  $173.85. In the event that the price takes this route, Ether would still need to overcome $160.33 and $166.22 if these former supports have turned into resistance levels. 

Both $160.33 and $166.22 also align with the 50% and 38.2% Fibonacci retracement levels and Ether price is currently situated in the sweet spot right at the 61.8% Fibonacci retracement. 

ETH USD daily chart

ETH USD daily chart. Source: TradingView

Ether price has again popped above the long-term descending trendline from the 2019 high at $364, which is another possibly positive signal for Ether. 

ETH USD daily chart

ETH USD daily chart. Source: TradingView

On the daily timeframe, the Bollinger Bands indicator moving average is also situated at the $171.30 target and traders will note that trend reversals typically rise slightly above the Bollinger Band moving average when momentum is bullish. 

If Ether price were to drop below the $150 support, the price could drop to the Bollinger Band moving average at $148 (on the 6-hour chart). Below $144, the price could drop back to the swing low at $131.69

ETH/BTC is boring but trying to breakout

As for the ETH/BTC pair, not much has changed since the pairing broke from its uptrend back below the long-term descending trendline on Nov. 23.

ETH BTC daily chart

ETH BTC daily chart. Source: TradingView

Ether price is currently hovering above the 0.020383 satoshis (sats) support. Ultimately, Ether price needs to clear the high volume node at 0.022380 (sats) in order to set a higher high and move to overtake the 200-DMA. 

ETH BTC daily chart

ETH BTC daily chart. Source: TradingView

Traders should look for an increase in volume on either pairing and watch to see if Ether breaks above the descending trendline on the ETH/BTC pair. 

Currently, the ETH/USD pair looks more bullish than its ETH/BTC equivalent and traders might consider opening positions at spot price with a sell target at $171 to $173, and a sell-stop loss order at $150. 

The views and opinions expressed here are solely those of the author (@HorusHughes) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.


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