Today we’re looking at the second biggest cryptocurrency by a fair mile, Ethereum(ETH). When we do, we always have to evaluate that Bitcoin leads the market in sideways or uncertain market structures. On the other hand, when Ethereum goes for a run, the complete altcoin market usually does well too.
What we can see is a sharp 60% correction from the top of around $4350 until the current bottom around $1720 on the 21st of May. A ‘huge’ correction you can easily say, after a massive 8 month run-up. When this run began ETH had a price of $340 so the altcoin is still up over 700% in the last 8 months.
If we look closer at the chart we can see that ETH formed a big volume spike(below in chart) when it hit the bottom. It started to consolidate around the orange line at $2550. You could even see a bottoming pattern in the form of a W. The immediate level to hold for ETH is the orange line.
The long term ascending light blue trendline also looks like it’s holding the price for now. The 200 daily MA, which is the green line, hasn’t been broken yet since the Covid dump in March of last year and should be decent support.
So what are the possibilities for the coming weeks?
Well, if Bitcoin performs like it’s doing at the moment, nothing wild and mainly sideways/ slowly up, ETH could see a test of the last resistance area in red. After this, the next target would be the red dotted line at the All Time High of around $4350. Breaking the All Time High could mean further upside for ETH.
If Bitcoin decides to test lower lows, ETH is also likely to go down and test the next critical area of support, which is the red box around $2000. It had multiple touches with this level and therefore it’s a strong support level. Breaking this level could eventually result in testing the old 2018 All Time High at around $1390, which is shown as the purple dotted line.