Analysis for Ethereum, as an alternative to Bitcoin. Is it worth buying now? What prospects has the most popular altcoin?
In this post, I applied the following tools: candlestick analysis, all-round market view, market balance level, oscillators, trading volume.
While Bitcoin is trading flat, let’s take a closer look at its alternatives. The first in our list, following Bitcoin, is Vitalik Buterin’s creation, Ethereum.
Before we start technical analysis, I’d like to remind you that Ethereum is not just a token, it is the object of speculation. Ethereum is the second generation of blockchain, 80% of all tokens are based on it, huge funds are attracted for various startups; and that is an enormous team of IT specialists and developers from all over the world, engaged in updating and universal application of the technology to our everyday life.
Investing in cryptocurrency always involves high risk, a three times higher risk is investing in a cryptocurrency that is backed up by nothing, but for a website, a couple of enthusiasts and a white paper.
If we take into account big traders and institutional investors, possessing huge Venture capitals, they are most likely to invest in Ethereum.
It means, Ethereum may really cost 10,000 USD, or even 15,000 USD per coin. Yes, maybe not in a couple of months, but on the scope of 3-5 years it can well come true.
If you have decided to invest in cryptocurrency, do it wisely. Study each side the project, define the prospects for your investing, reasonably assess your risks and go ahead!
Those, who are willing to invest for 3-5 years, don’t need technical analysis at all. Does it matter, whether the token costs $700 or $500 now, if in a couple of years it will cost $10,000 ????????
For the rest of you, those who need technical analysis, I’m finishing my distracted reflection and switching to technical analysis for Ethereum.
Let’s start with looking back at my last projection for Ethereum, I suggested for USD and BTC almost two weeks ago.
For ETHUSD, I indicated the levels of 712, 650 and 531 USD
For ETHBTC: 0.0755; 0.071; 0.067 BTC
The real situation is in the chart below:
We see that the key levels of 712 and 650 USD were reached by ETHUSD
For ETHBTC, there was only one opportunity to enter the market, at the level of 0.0755 BTC.
What will be next?
Let’s start with ETHBTC.
In the weekly chart below, we see that the channel’s moving averages moved up, the ticker itself is at the upper border of the channel, at about 0.08488 BTC. This level makes up a strong resistance that can cause a temporary correction, driving the price back to the channel moving average at about 0.074-0.073.
The previous weekly candlestick closed with a very long tail, directed upward, suggesting Hanging Man pattern. This pattern is a bearish reversal pattern, suggesting a possible correction. If this week shows a black candlestick, the pattern will be confirmed and we can safely take profits and consider the targets for already short trades.
Those, who entered trades at the levels indicated in the previous forecast, I recommend protecting their profits and moving stop orders at the level of entry.
Analyzing ETHUSD, we see that in the weekly chart, Keltner channel’s borders have hardly changed; the channel’s moving average is almost flat, slightly inclined upwards, which means the trend is fading off and the ticker is sliding into a sideways trend.
Analyzing candlesticks, it is more difficult to suppose a Hanging man, as the lower tail is too short, and none of the previous extremes is touched by the price. This weekly candlestick is still fits inside the previous one. If it goes on like this, the ETHUSD price will draw a triangle, whose breakout will determine the further move.
In addition, if we look at MACD oscillators and RSI stochastic (see the chart below) they are still sending buy signals, showing the price growth. MACD is in the green zone, and RSI hasn’t yet entered overbought zone.
However, if we look at the daily chart of the same pair (see below), we’ll see the opposite situation.
We see the ticker moving inside an ascending channel and red MACD, indicating the price fall. RSI stochastic is in oversold zone and is not going to exit, having stopped at the window lower borders. This situation suggests the local lows around 627 USD are likely to be tested. If we go on and analyze 12-hour timeframe, we’ll see bearish correction developing (see the chart below).
We see the ticker pointing downwards. Oscillators are directed downwards. RSI stochastic hasn’t reached overbought zone and reversed close to it. MACD sends red signal to sell. The only thing that prevents bears from dumping the market below 627 USD is low trade volume. People are just fed up with uncertainty, and many prefer to stay aside from this dull and depressive market.
Now, let’s come back to ETHBTC.
According to the ticker direction, Ethereum looks stronger against Bitcoin than against the US dollar. However, Ethereum also looks like it is going to start price correction. The first, very weak, support here is the market balance level of Keltner channel at 0.078. The next support is around weekly market balance level at 0.073.
In 12-hour chart, it is even more evident that ETHBTC price is going to be corrected. Here, there is hardly anything new, except for RSI stochastic. We see it has reached overbought zone and reversed for the correction.
ETHBTC and ETHUSD don’t look strong for bulls now. General recommendation for both instruments is protecting the profits, gained and moving stop losses to the breakeven in case of the final reversal.
On the global scope, the market is still, Ethereum is trading flat. You mustn’t go short in this situation. As the market can easily drive the price beyond the local highs and trigger stop orders.
Forecast for ETHUSD:
- ETHUSD is most likely to continue trading flat.
- Level 627 USD is highly likely to be reached.
- The price can move lower only if Bitcoin drops very deep.
- Level 530 USD is less likely to be touched by the price. It is possible only provided that there is large trade volume, which isn’t in the market now.
- The price will hardly go down lower than the indicated levels during the next two weeks.
Forecast for ETHBTC:
It is even simpler for ETHBTC.
Here, there is a clear support level around 0.074 – 0.073, where there is weekly market balance level and the lower border of the weekly candlestick. The ticker won’t meet any strong support on its way to this line, so, I think the price is most likely to be corrected down to these levels.
A deeper fall could start only if there is a strong panic, which is hardly possible in such a lazy market.
I wish you good luck and good profits!
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Price chart of ETHBTC in real time mode
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