Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Ethereum [ETH] has, as some Twitter denizens like to say, “melted faces” over the past week as the asset surged from the range lows to post an impressive 50% gain in just under a week.
Since late November, the longer-term trend was bearish. The bulls took the initiative with the recent breakout of the range. Buyers have two options to reload their stocks: the price charts and the market.
ETH-1 Day Chart
Source: ETH/USDT TradingView
The daily chart showed that the $1750-1950 region was the strongest resistance. This zone was a support/resistance area in July and March 2021. As of the writing of this article, it was resistance, but this time, it was a long-term one. This gave the region an extra meaning.
Also, note the consistent downtrend in recent weeks, particularly in April. The price formed a range in June (yellow) which Ethereum has broken from within the last few trading days.
Relative Strength Index, (RSI), also passed neutral 50 to prove that bulls were in control. This was a welcome change for the buyers, who had toiled in a downward trend since April, evidenced by the RSI’s inability to break neutral 50.
Chart for ETH-4H
Source: TradingView ETH/USDT
The four-hour chart showed the latest range (yellow), more clearly. The range highs/lows are at $1,280 and 1,000 respectively. On many occasions, the $1,140 mid-point of this range was used as support or resistance when the price was within its range.
This has given credence to the idea that a range formed. The range highs were broken by ETH’s recent breakout, which saw ETH rise nearly $300. Also, the range’s width was almost $300 ($280), so there could be a slight pullback.
Two areas in cyan were highlighted where bulls could look for higher lows. These were the $1.440 area in early June, and the range highs of $1,280-$1,300.
Source: ETH/USDT TradingView
For the fourth hour, the RSI was at 60. This highlights strong bullish momentum. A deeper pullback could lead to a hidden bullish divergence, which is a lower low on RSI and price.
The On-Balance Volum (OBV), has been moving northward as well. In the last week, a level of resistance that was established in June was broken. This suggested that ETH may see further gains thanks to hefty customer demand.
Chaikin Money Flow (CMF), which also rose above +0.05, showed significant capital flow to the market.
Conclusion
Although the long-term picture is bearish, recent developments have shown that there is some improvement.
For both bulls as well as bears, the $1750-$1950 zone could prove difficult to navigate. The Ethereum surge has suggested that Ethereum could move towards $1800 in the next few weeks.