Ethereum has been doing some relatively big moves recently, therefore, we are bringing an extensive Ethereum (ETH) technical analysis on a 6-hour ETH/BTC chart from Binance.
So, for the sake of all swing and long-term traders out there, let’s dive right into it.
Ethereum RSI divergence analysis
The basis for the initial 38% surge from 0.016 to 0.0222 BTC was the RSI divergence that was spotted in September and early October.
As we know, divergences announce the trend reversal. The same is with RSI divergence, which, in this case, confirmed the bullish reversal. Price lower lows overlapping with Relative Strenght Index higher lows are a blatant example of this movement indicator. Especially when it happens over such a long period.
Ethereum testing the 0.02 BTC support
Now that the ETH price rallied, it is interesting to see if the new-found bullish trend is going to last. Therefore, let’s see if there is some support at higher prices.
As you can see in the chart above, for now, Ethereum established pretty strong support at 0.02 BTC. That fact alone can raise optimism among ETH holders. Still, the support was only tested three times, thus, it remains to be seen if 0.02 BTC support level will hold.
There is another interesting thing about that support. The following chart will reveal that it is, in fact, almost exactly at 38.20% from the peak according to the Fibonacci retracement.
The rising wedge
When we zoom in, the 6-hour Ethereum ETH/BTC chart exposes the rising wedge pattern on the way towards the latest peak.
Naturally, the price movement inside the rising wedge means that the trend is going to reverse, which also happened. Luckily for those going long, as mentioned before, the support stood its ground. At least for the time being.
Ethereum (ETH) future movement technical analysis
In order to forecast the upcoming Ethereum price movement, we have used the following indicators:
- MA cross
- Buy/sell pressure
- Buy/sell volume
The chart above reveals that we are looking at the possible gold cross. The gold cross is usually a strong buy signal, especially combined with other positive parameters.
Regarding those positives, the MACD readings hold a good short-term perspective. The MACD crossed over the base-line, which is a good short-term buy signal. The following two indicators are unique for the Coinalyze trading tool and are useful for depicting the current market sentiment.
The buy/sell pressure clearly shows that the buying pressure is dominant at the moment and that the trend is favoring bulls. That stance is confirmed by the buy/sell volume indicator. The latter shows that there is much more buy than sell volume during the last two days, best depicted by our blue horizontal line at 50%.
However, there is a reason for extreme caution.
Ethereum Bollinger bands and daily technical analysis
The current price movement doesn’t show either overselling nor overbuying trend for Ethereum. Therefore, the price is staying inside the Bollinger’s trading bands extremes. At the moment, ETH holds ground inside the upper level. However, if it crossed the moving average, there is a possibility of overselling, which could bring the price down below the 0.02 BTC support.
On the other hand, if we want to see the big picture, we have to zoom out and take a look at the Ethereum ETH/BTC technical analysis on a daily chart.
The chart above reveals that Ethereum has a long-term negative price movement inside the channel. This is a comforting thing for those shorting on some of the derivatives trading platforms. Nevertheless, it still hasn’t reached the falling resistance (lower highs level), so there is some room left for profits there. Of course, only under the assumption that the 0.02 BTC support stays firm.
The other thing that the chart depicts is a long-term support line at 0.024 BTC. It is possible, if ETH breaks out of the channel, that the thin blue line starts acting as resistance. Still, if Ethereum can break above 0.02 BTC, there are much brighter times coming for ETH holders. However, it is highly unlikely that this scenario will come to pass this until the end of December.
After the whole analysis, it is important for all our readers to understand that this is a sensitive time for Ethereum. Both, negative and positive scenario is possible. There are three crucial things to keep an eye on:
- The 0.02 support
- The lower highs on a daily chart
- The possibility of forming a new rising pattern (the chart below)
Our technical analysis is done with the professional cryptocurrency trader’s tool – Coinalyze.
You should look elsewhere for investment advice since this is not it. Even if it looks like it. Cryptocurrencies are known to be extremely volatile and risky speculations. Always do your own research. Consider to consult an investment professional prior to investing your money.