Ethereum (ETH) has been bouncing in the last couple of days, after colliding and ultimately rejecting out of a significant resistance/inflection zone around $280 last week. The bounce has landed ETH right back in that zone; but there are some warning signs on the chart that bear watching, even if they don’t amount to downside within ETH’s ultra-bullish trend (and it is).

We first draw our focus on the versatile 4-hour ETH/Dollar chart, and clearly see a bearish divergence painted on the RSI. If the leading altcoin continues to get bogged down within this resistance, the prominence of this divergence may start to sway buyers into a retreat and flight into cash or Bitcoin (BTC).

Clear warningsETH chart by TradingView

On the histogram, we see a market that is getting choppier on the lower timeframes. The latest candle closed with a sharp reversal of a developing contraction; based on this, we could well see ETH break out of this zone and up into safety.

On the ETH/Dollar daily chart, we see that the Ethereum RSI has had some time to cool off from its blistering MTF uptrend. The main question here is: was it enough time? And the answer is potentially yes, as the histogram has already laid two bars in a bullish expanding arch.

ETH needs another leg up into safetyETH chart by TradingView

But again, even here there is a plainly visible bearish divergence that would be foolish to ignore.

There are no clear answers here. In some respects, ETH was and is still looking overheated, leading one to think a consolidation or retracement necessary. We see vigorous defense of some key levels. What’s more, we are clearly in a very bullish market across the crypto space; and in a bull market, surprises come in the ‘up’ direction.

Ethereum needs to break $285 soon to give its indicators more room to run and cancel the bearish divergences forming. The long it sits under that level, the more dangerous things will be. But ultimately, the trend is still up.

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

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