Ethereum Looking Stronger as Crypto Markets Quiet - Price Analysis

  • Short term: Potential bounce play to watch out for.
  • Long term: Trend remains down overall until clear signs of reversal.

Anyone who has been watching Ethereum (ETH) in the past two to three months has probably become bored by now, because the picture has hardly changed in all that time. ETH has been consistently losing price, after going through a major capitulation event on its BTC pairing. But now, we are finally seeing some signs of strength building, perhaps as a response to the extremely oversold conditions we have seen lately. Time will tell if these signs will stick.

Starting on the 3-day ETH/BTC chart - a pretty high timeframe (HTF) chart - we first of all see a clear bull divergence on the RSI indicator. This is the first time on such a HTF chart that we’ve seen bull a divergence in a while, and it supports the theory that a bottom may finally be in for Ethereum.

Solid bull divergenceETH chart by TradingView

We also see that the histogram has ticked up sharply in the past week of trading, and the MACD (not pictured) has indeed crossed bullish - although it is very far away from the positive side of the chart, and taking such a cross as a buy signal while still in a downtrend is not advisable.

The 9 exponential moving average seems to be the first milestone to clear on this chart, as price on this timeframe has not been able to close above it since June. It remains to be seen on the 3-day if a higher trade volume can be put in; and if we see higher buy volume and a close above the 9 EMA, we could have the start of a reversal.

Zooming in to the 12-hour, we can see that a top side has been set at the 55 EMA. The MACD bullish cross signaled the bounce a few days ago on this timeframe, and pushed the histogram well into positive territory. The histogram has gone over the top and is now trending back down, and it will be interesting to see how steep the dip is.

A bounce would provide a good entryETH chart by TradingView

We should look for support around the 9 and 21 EMAs, as if price can hold there we may well see a second leg up for Ethereum - and this second wave is likely to be stronger than the first. Also to watch is where the RSI finds support here, ideally above 50.

How has this translated into the USD price? Pretty much the same thing. Price bumped after a bull divergence on the RSI, and here we see both higher highs and lows - and we wait to see if the RSI trend can hold on the dip.

Hold at $175?ETH chart by TradingView

The histogram peaks have seen a higher high, and the MACD is about to move into positive territory, although it has a risk of crossing back down. Price has been contained at the 55 EMA, and has briefly lost the 21 EMA during trading periods but has not closed below this level.

The solid histogram performance, strong RSI performance, and rising price here has a chance to keep Ethereum above $175. If it can hold there, we could see another leg up just like on the ETH/BTC chart. And with Bitcoin’s chart a snooze-fest, perhaps this is the perfect time for some Ethereum TLC.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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