Since early September, altcoins have been outperforming Bitcoin (BTC) after months of brutal price drops - and for no other crypto is this truer than Ethereum (ETH) which faced a capitulation in price down into 2017 price territory. And as the leading altcoins cool off from their recent price bumps, we consider if these movements represent broad price reversals from the steep lows.
Starting with the daily ETH/BTC chart, we see a picture of health. Buy volume has been building on every rally up, and the exponential moving averages (EMAs) are crossing bullish, with the 55 and 21 about to cross. ETH is here stopped at resistance, but it is slowly retaking its capitulation support zone.
The indicators are strong, with the RSI making higher highs and lows after a bull divergence. But the RSI is now deeply overbought, and a retrace here is likely. Ditto for the histogram, which is topping out and flattening after an intense run to the positive side of its range.
Indeed, if we look on a 4-hour ETH/BTC chart with indicators, we see signs of some exhaustion on the present rally. Buy volume on this timeframe is starting to fall on the rallies, and price is testing the 9 EMA regularly.
RSI is diverging bearish from overbought conditions, and the MACD/histogram is clearly losing strength. Some consolidation at this local top is likely, and we could see a retrace anywhere above the 55 EMA. The higher the better, signalling strength for a possible next leg up.
Finally, on the USD side of things, we see on this 2-day chart that Ethereum is getting stuck in a zone of heavy resistance from the summer, around the low $200’s. This is a good, and predictable place for the leading altcoin to catch its breath. We can see on the histogram that the rally is starting to roll over; however, the MACD is pointing up hard (not pictured) which suggests an overall uptrend.
Overall, Ethereum looks like it has found bottom and - finally - reversed in the long term. This theory will be tested in the days or weeks to come, as the leading altcoin is likely due for a bit of a break from its rally. The severity of the retrace, and the buy support that comes in, will help us further determine if a larger - for the rest of 2019 and into 2020 - uptrend is truly taking hold.
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