While Bitcoin continues its recent trend of dominating headlines, Ethereum has been flashing bullish signals making a rally to the $6,000 level and above possible in short order. Ethereum will have to surpass several key level of resistance before reaching new highs.
When tracking the daily charts, Ethereum has displayed the much desirable cup-and-handle pattern, forecasting a bullish push to higher valuations. The cup-and-handle forms on a chart when there is a period of decline on an asset followed by stabilization and then growth to match, and even dwarf, the previous decline. Ethereum has flashed that very pattern in combination with another bullish signal, an ascending triangle, which is displayed when tracking the resistance trend line from the previous five months and the ascending trend line that formed in late July.
Analyzing Ethereum’s cup-and-handle pattern and measuring the depth of the cup to gauge the potential for a future climb upwards, a pattern emerges that shows the potential for a 60% jump in valuation. In combination with the aforementioned ascending triangle, bulls should expect Ethereum to challenge and push past $6,000 in valuation.
To fully break out, Ethereum will need to rally above its previous resistance trend line which formed earlier this summer, which also just happens to coincide with the handle’s top on Ethereum’s chart, a over promising coincidence. A move past the $3,900 resistance level is required for Ethereum to enter a new bullish cycle, challenge it’s all-time high of $4,360, and push upwards towards $6,000 and higher.
Further price charting shows that if bulls takeover and push Ethereum into new highs that there will be two morr key resistance levels to challenge and overcome before truly breaking out. The first battle will be found in climbing past a valuation of $5,090 and the second at about the $6,000 level. If Etherium can rally past those two levels then it puts into play continued moves upward.
Conversely, if the bulls fail to push Ethereum higher there are two built-in levels of support at lower levels. Those would be found at the 20-day Simple Moving Average of $3,622 and the 50-day Simple Moving Average of $3,465. If, in opposition to all of the bullish signals, a downward trend does emerge, those two levels of support represent the most fundamental bottoms for Ethereum during selling pressure.
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