Ethereum Having Trouble Getting Over the Top In Breakout Scenario - Price Analysis

  • Short term: breakout/rejection scenario -- there will be a trade one way or another
  • Long term: likely long term uptrend in play on BTC pairing

Since early September, Ethereum (ETH) has been in an uptrend. When Bitcoin (BTC) broke down last month, Ethereum also took a big hit, but recovered and continued gaining -- until hitting a key resistance zone within its market structure. Now, pushing against this resistance, we are seeing ETH struggle to break through.

Starting on the daily ETH/BTC, we can clearly see the importance of this zone, around ₿0.0224. A few solid days of buying pushed the leading altcoin to this point, despite coming off of a clear bear divergence on the RSI -- most likely a consequence of Bitcoin’s violent dump and its effect on almost all altcoins.

Right on the lineETH chart by TradingView

Coming down to an 8-hour chart, we see a mixed picture of strength and weakness at the resistance level. The RSI performance is solid, with a higher high matching the latest price peak. The histogram, however, looks troublesome here, arching down hard on this candle at time of writing.

A fightETH chart by TradingView

We must also notice, however, that Ethereum’s histogram has been very choppy lately, which is visible on this chart. Sharp reversals have caused a scattered sawtooth pattern across the indicator, so we must take a bearish reading here with a grain of salt.

On the daily ETH/USD chart, we see something less than an uptrend like on the BTC pairing. Rather, we see either what looks like the middle or end of a downtrend. It isn’t certain; but what is certain is that the histogram looks to be rolling over after having a nice pop yesterday, inflated by Bitcoin’s own pop.

The $190 level is key hereETH chart by TradingView

This brought Ethereum over a critical resistance at $190, and over the 21 exponential moving average (EMA). But this breakout is still very shaky, owing both to Bitcoin’s own shakiness, and to ETH/BTCs waning strength. We could easily see ETH roll over on this chart to lower supports.

In sum, Ethereum is on the edge of a resistance zone and could go either way. Its BTC pairing is bogged down at a resistance, but could easily blow through it with a bit more buying support. Likewise, there are some signs that that chart is losing steam. Then there’s the question of what Bitcoin will do today -- and how it will affect Ethereum (three weeks ago, ETH/BTC dumped when Bitcoin dumped; but yesterday, ETH/BTC pumped when Bitcoin pumped). We should know soon.

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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