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The legend of trading outside of the cryptocurrency industry, Peter Brandt, revealed that he has been building a bullish case for Ethereum since May 17 and even included an action plan for buying. Unfortunately, he did not reveal what is going to happen with ETH in the future, nor did he provide additional details on his buying plan. That is why we will have to address the price chart we have right now.
Obviously, Ethereum is ripping and tearing the market right now, with the price of the second-biggest cryptocurrency slicing through the $3,600 resistance like a knife through butter. One way or another, there is no base below the price, so keep in mind that any correction could turn into a substantial one.
With the breakthrough above $3,600, we should be ready for a stronger move up at around the 50-200 EMAs. But as we mentioned above, do not fall for the rapid price increase as prices after that are really unstable. Also, keep in mind that even Brandt's plan could include a bearish scenario in which Ether reverses around $4,000.
However, with such rapid gains, the risk of a correction is always present. Ethereum's current price surge lacks a solid support base, meaning that any pullback could potentially lead to a significant drop. Traders should be cautious and consider setting stop-loss orders to protect their investments.
By using RSI, we can determine whether or not Ethereum is entering the overbought zone. Unfortunately, for now, the indicator shows that Ether is on the verge of becoming overbought and potentially facing a reversal in the foreseeable future. Thus, if you are going long, make sure to avoid overleveraging existing positions.
In general, Brandt's bullishness on Ethereum around May 17 made some sense, considering ETH reaching the local support level of the 200 EMA, which acted as a springboard for it.