Today, CoinSyncom brings you an Ethereum price analysis on the 2-hour ETH/USD BitMEX perpetual chart. We have decided to do so because ETH is, currently, in the most sensitive moment in the last 20 days. Therefore, without any further ado, let’s dive into analyzing the second biggest cryptocurrency in the market.
Ethereum Chart Analysis – The Symmetrical Triangle
The current situation on the Ethereum chart is beyond crucial. The importance of the next few hours is paramount. As the chart below reveals, ETH took the symmetrical triangle formation since November 25th. By default, the symmetrical triangle is neither bullish nor bearish. However, looking at the big picture, Ethereum is suffering from long-term bearish traders’ sentiment.
It is obvious that the triangle is reaching its peak. Therefore, this moment in time gets even more important. Naturally, the trading volume declines counter proportional to the market indecision and the indecisiveness really started to kick in.
In other, more professional words, all relevant indicators reveal that, once the ETH price hit the higher low, traders became unsure of the future movement.RSI, Stochastic, CCI, Williams %R, and Bollinger Bands all show neutrality through the 5-minute to 2-hour timeframes.
In order to explain what can happen next, we’ll dig a bit deeper into various indicators and how Ethereum got to this tight spot in the first place.
The Divergence as the Trigger for a Triangle
Our Ethereum price chart analysis exhibits that the foundation of the triangle came from a divergence spotted at the end of November.
The divergence worked perfectly, and those who acted accordingly could profit nicely from a short-term trend reversal in the middle of the bearish movement. Nevertheless, the overall selling pressure was too much to handle for buyers. Therefore, the price continued reaching only lower highs. Simply put, a perfect scenario for an indecisive formation.
When in doubt, a good idea is to check the Fibonacci retracement and see if it provides some valuable data. Needless to say, we did just that as we wanted to discover if there are important levels to provide support and resistance.
According to Fibonacci retracement, the 0.5 at roughly $144 is long gone as support. Moreover, Ethereum disregarded the 0.618 level entirely to reach the current higher low of $140. Here lays the key to the uncertainty.
Will Ethereum continue to decline towards Fibonacci’s 0.786 or it will completely disregard the FIbo levels and rally towards the new lowe high. It is important to note that the mentioned 0.786 is exactly at $137.
Ethereum Price Chart Analysis – the Support, Bollinger, and Practicing Caution
If you still feel indecisive to take a position, you’re not to blame. However, there are a few things you may want to keep an eye out for to help you make a final decision.
Regardless of the Fibonacci levels, Ethereum has established short-term support at $140. The price already bounced off this level two times before making it an important possible rally-starting point.
Another crucial short-term indicator, Bollinger Bands, is also at the pivotal phase. The price has reached the lower band. If bulls can resist overselling, and the price crosses the median, it will be a good sign that we may reach another lower high before eventually breaking out of the triangle.
But which way is it, eventually, going to break out?
Looking at things from this perspective, it is still difficult to tell. However, the Ethereum price chart analysis published on CoinSyncom on December 3rd revealed that ETH will remain bearish. We still believe it to be so. Therefore, we give Ethereum a 70% possibility to break southwards of the higher lows line and reach the target mentioned in the mentioned article. After that, the short target we’ll be looking for is roughly $110 since that is the spread of the triangle’s base.
Nevertheless, traders should exercise the highest level of caution while trading ETH at the moment. A short with high-leverage on some of the derivatives trading platforms placed today can easily be liquidated if the price jumps towards the lower high one more time. Therefore, our warmest advice is to wait for the confirmation of the breakout before taking a position. This way, you may lose a percent or two of your profit but, in return, you’ll substantially lower the risk.
You should look elsewhere for investment advice since this isn’t it. Even if it looks like it, it’s not. Cryptocurrencies are known to be extremely volatile and risky speculations. Always do your own research. Consider consulting an investment professional prior to investing your money.