Ethereum price analysis – Heading towards $850



 

Ethereum price continued rising along the uptrend line that has been evident since the second week of April, to score a day high of $770 during Thursday’s trading sessions so far. The market’s bulls managed to break through the resistance around $713.24 on Wednesday, as we expected during our previous Ethereum price analysis. Chances are high that we can see the price of ether continue rising, especially that the next significant resistance lies around $849.08, as we will see later during our analysis.

However, can we expect a downwards price correction attempt to occur, before the market’s bulls can push the price of ether to higher levels?

“Bullish Crossover”  of the Moving Averages on the 4 hour ETHUSD chart:

Let’s examine the 4 hour ETHUSD chart from Bitfinex, while plotting the 50 period SMA (green curve), the 200 period SMA (red curve), and the MACD indicator as shown on the below chart. We will maintain the Fibonacci retracements  we plotted during an earlier analysis, which extend between the low recorded on October 23rd, 2017 ($273.50), and the high recorded on January 13th, 2018 ($1,424.06). We can note the following:

  • After dipping temporarily below the upwards trend line (blue upwards sloping trendline) on Tuesday and Wednesday, the price of ether soared to break through the resistance around the 61.8% Fib. retracement ($713.24). Right now, the next significant resistance lies around the 50% Fib. retracement, which corresponds to the $849.08 price level, so even if a downwards price correction attempt becomes temporarily active, it is highly likely for the price of ether to continue rising towards this level.

 

  • The 50 period SMA has crossed above the 200 period SMA (bullish crossover) as highlighted on the above chart. This reflects the current bullish sentiment of the market.

 

  • The MACD indicator is conveying a few bullish signals. The blue MACD line has crossed above the red signal line. The MACD line is sloping in an upwards direction and its value is in the positive territory.

 

  • Since April 7th, the current bullish wave has been characterized by bullish bursts followed by downwards price correction attempts. These cycles have been guided by the upwards trendline that always acted as a rising support level that prevents the downwards price correction attempts from pulling the price of ether below its level. However, ethereum price dropped temporarily below this rising support level during last Tuesday’s and Wednesday’s trading sessions. As such, we can expect a brief price correction attempt to pull ethereum price downwards again near $713.24, before rising again towards the resistance around $849.08. There are 3 reasons for this:
  1. Ethereum price is facing a minor resistance level near $770 as evidenced from historical charts
  2. The Stochastic’s value is currently near 92 (>80)
  3. The RSI’s value is currently 76 (>70)

Williams’s Alligator’s mouth is “open and eating” on the 1 day ETHUSD chart:

Now, let’s examine the 1 day ETHUSD chart from Bitfinex, while plotting the Ichimoku Cloud, the MACD indicator, and the Williams Alligator’s SMAs, as shown on the below chart. We will also keep the Fib. retracements we plotted above. We can note the following:

  • A very long bodied bullish candlestick has been formed today after the resistance around the 61.8% Fib. retracement was breached, which reflects how this level has been greatly resisting advancement towards the North.

 

  • The Ichimoku Cloud is green (bullish), so we can expect that the market sentiment is mostly bullish especially during the next 2-3 weeks, noting that Ichimoku Cloud is shifted 26 period (days) into the future.

 

  • The Williams Alligator’s SMAs are exhibiting a bullish alignment, so the alligator’s mouth can be said to be “open and eating” in the bullish direction.

 

Conclusion:

As per analysis of the 4 hour and 1 day ETHUSD chart, the most logic scenario is to see a downwards price correction attempt becomes temporarily active for a few hours, before we can see ethereum price head towards $849.08 during the next few days.

Charts from Bitfinex, hosted on Tradingview.com

 



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Posted in Digital Currencies.