Just as Bitcoin (BTC) pulls itself back from the edge of another trip down, Ethereum (ETH) is following suit and keeping itself within a consolidating range. The compressing price action, along with shrinking trade volume suggests that a bigger move may come soon for the leading altcoin.
We start with a 12-hour ETH/BTC chart, whose most important feature is the red band on the top of the chart. This marks a multi-year low that Ethereum broke earlier this year, and we can see that this is almost exactly where an ETH rally lost steam on October 9.
Using the Volume Profile indicator, we can make out the inflection area (grey) of the structure by finding where less trading has occurred. Ethereum is managing to stay above this zone for now, but the shrinking range will force the altcoin to break one way or the other pretty soon.
Moving to the daily chart, we see that a strong uptrend for Ethereum that started in early September is deciding whether to stay an uptrend. If the altcoin breaks the support level set by the previous swing high (orange box), we can consider that uptrend at least in jeopardy.
Recent price action has exhibited a bear divergence from RSI, and another rejection off this trendline may send the altcoin down. Today’s histogram close seems rather important, as the profile of the arch -- up or down -- will forecast ETH’s likely direction.
Looking at the bigger picture on the 3-day USD pairing, we see that all of this is an elaborate retest of the very important inflection zone around $160, after a correction from a very strong H1 2019. This area marked the swing point for the bottom of ETH’s very big correction, during the bear market of 2018 -- after it dipped down into double-digits.
The good news here is that the RSI seems to be steadily reclaiming territory in a march back to the top half of the range. The histogram too has refused go into negative territory, with a very choppy and un-smooth trend action. This is because ETH’s chart is so influenced by Bitcoin’s price action.
On both charts, Ethereum is struggling next to important levels; below a huge resistance on one, and above a huge support on the other. We must take it a day at a time.
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