This will be a short update on the market since my Bitcoin and Ethereum analysis last week. I’m mainly interested in Ethereum right now as I think the upcoming Constantinople Hard Fork will give it a performance boost over Bitcoin.
So far this theory has been validated as the ETH $85 accumulation range I pointed out earlier this month held strong as Bitcoin dropped. Each time price reached this range it bounced hard indicating lots of buyers eager to get in.
The Bitcoin reversal has since played out beautifully and prices have rallied from the $3300 range to nearly $4000 in about 3 days. That’s a gain of nearly 20% but the big news here is ETH which managed to rally from the low $80 range to now $108, an increase of nearly 35%.
Now that we’ve got the crypto rally we’ve been waiting for after that massive bear run, where do we go from here? Short term target is the 4HR 200 EMA, this is where I think we will see a slight pullback /consolidation period to allow momentum to recharge, this will be a good time to add to my position.
There is a historical trendline resistance on ETH that is very significant, as it forms a massive falling wedge-type pattern channel dating back to December 2017. This confluence make this price point a great selling opportunity, this is where I will most likely reduce some risk and watch to see if price can break this resistance.
Chances are high that if price does break above this historical trendline, the next sell target will be at the Daily 200 EMA which is currently around $269. Another sign of confluence in this range is the 0.786 fib retracement level that is in the same zone.
Momentum oscillators suggest the market has the strength to break through the trendline as price has nearly reached the apex of the pattern. I also notice that the Daily 34 EMA is showing confluence with the historical trend line resistance.