Updated forecast for ETHUSD. When to buy Ethereum? What is the most popular altcoin promising?
In this post, I applied the following tools: fundamental analysis, all-round market view, market balance level, candlestick patterns, oscillators, volume profile, trendline analysis.
It is midsummer and the cryptocurrency market is as hot as the weather. Today, summing up the monthly results, I’d like to analyze the ETHUSD pair.
I always say that Ethereum is one of the most promising altcoins, and every cryptocurrency investor should have it in the portfolio.
The developing team suggests updating Ethereum protocol to use a hybrid consensus mechanism in the first quarter of 2019. Then POS-consensus will be available, i.e. any Ethereum holder with a minimum allowable deposit will be able to earn on mining. In addition, with the growing number of coins, POS-mining capabilities will increase, as well as the incomes.
In this context, investors will benefit from pressing Ethereum down as low as possible to buy it at the cheapest price.
So, before Casper is launched, I expect a lot of tries to stop Ethereum growing, or create a bearish trend to drive it to the very lows.
Bad for manipulators, but there are very few ways to press the Ethereum rate. SEC was on time, announcing Ethereum not to be a security; so, now manipulators can’t use one of the most important factors.
Moreover, compared to other altcoins, it is now a significant advantage, as the rest of the cryptocurrencies are yet to receive this status, and so, the uncertainty and the associated risks are far higher for Ethereum rivals.
Currently, Ethereum has only one weak point before Plasma is launched; it the processing capability of ETH blockchain.
That is where manipulators can press to do the most harm to Ethereum network, as well as to all projects, based on this blockchain. It is about 90% of all altcoins.
All Ethereum users witnessed such an attack not long ago, when the transactions in the network were very slow and the commission cost jumped up to 1 USD.
This situation resulted from an incredible rise in the transaction volumes for some Ethereum-based tokens (DATx, OCN, LET, ARP, NC, AIT, IONC, TBCoin, LXT, Drink, BRM, HPC, GRAM, EES, 3DB, SGCC, ICC).
This unnatural situation featured very high transaction cost for a transfer that was over 400 gwei.
This network SPAM resulted in that the transactions of the users with low gas level were frozen in a long queue. All blockchain power capability was devoted to the expensive spam transactions.
Another danger for Ethereum growth, from a fundamental point of view, is, surprisingly, altcoins rise amid the emerging optimism in the market. Many small Ethereum-based altcoins are now 40%-70% down against ETH and look quite appealing for long-term investment. As some liquidity flows into the altcoins from Ethereum, there will be additional supply in the market, badly affecting the ETH price.
So, from a fundamental point of view, I suggest an excessive pressure on Ethereum till the end of the year. Therefore, there will be higher volatility that, on the one hand, will attract speculative capitals to the market, on the other hand, will scare off long-term investors.
Now, let’s see Ethereum state with technical analysis.
In my last forecast, I wrote that Ethereum was in the support zone of the green triangle and expected it to drop down to the bottom border at 440 USD.
In the end, buyers couldn’t hold the key level and the bottom border of the weekly Keltner channel; in fact, Ethereum dropped to 404 USD.
Nevertheless, I think the forecast to be quite successful, as the general trend and the main price moves were indicated rather accurately (to compare, see the charts above).
Unfortunately, as the triangle bottom border was broken out, this pattern loses its strength, and so, the scenario of breaking out from below (the blue arrow in the chart) needs revising.
To update the scenario, let’s start all-round market view with the monthly timeframe.
It is clear from the chart above that the key levels of April in the open zone and the low wasn’t touched. In addition, June’s low didn’t break through April’s open, which makes the level he support zone.
In general, Keltner channel’s borders are getting narrower, which suggests lower market activity and a global sideways trend.
The point of control in volume profile is at 305.
Therefore, there are multiple key levels for ETHUSD in the range between 405-305. The zone can be market as the single support zone for the next few months.
In the weekly chart below, you see that the ticker hit Keltner channel’s bottom border (black line).
In general, there are no direct pivot signals there. However, it is already clear that hidden bullish divergence will emerge soon (the blue line in the chart above). Nevertheless, oscillators remain bearish, so we can’t expect Ethereum rapid growth.
In the daily timeframe, there is a clear bearish channel, where the ticker is close to the top border. MACD paints a series of bullish convergences that suggest a soon stop of the bearish trend.
Currently, RSI stochastic is in the overbought zone; therefore, a full-scale bullish correction is not so likely now.
ETHBTC is in the descending channel now; however, the trend is slowing down, and the ticker itself is in the falling wedge, whose breakout can create a bullish momentum.
Fundamental factors are mixed, so, there will be great uncertainty with the trend. It suggests a long sideways trend with strong volatility within the channel.
Zones both for buyers and sellers are quite wide.
Strong support for buyers is expected in the range between 405 USD and 305 USD.
The zone for sellers is between 530 USD and 630 USD.
I don’t think the price to move beyond the above zones this month.
I wish you good luck and good profits!
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