Analysis for Ethereum against Bitcoin in the situation of the market chaos. We’ll see how the altcoin behaves in the situation of the market uncertainty and suggest the next targets for Ethereum.
In this post, I applied the following tools: Japanese candlesticks analysis, all-round market view, market balance level, oscillators, graphic analysis, trading volume.
In my previous post I already analyzed Bitcoin, compared to Ethereum. Today, I’d like to go on with this and study how Ethereum is doing amid the recent events.
As I said before, when Bitcoin is down, it is one of the best moments to look for strong altcoins to buy.
Ethereum is a perfect example of how a coin, you’re going to include in your portfolio, should look.
As clear from the chart above, Ethereum has the strong support at the current levels, and it hasn’t renewed its local lows, following BTCUSD.
In the monthly chart above, we see that May closed with a candle that looks like a shooting star pattern.
The only thing I don’t like about this situation is April candlestick tail, that shouldn’t exist at all, according to Japanese candlestick analysis. Besides, we should remember that this pattern will work only after a strong trend move. At the same time, the signal will be stronger if the indicators are in the overbought zone.
In this case, there is no neither the first, nor the second signal (see the chart above, RSI stochastic is close to the oversold zone); therefore, we shouldn’t think this pattern as 100% bearish. However, if this month closes below May’s low, which is below 0.07 BTC, the market sentiment may fundamentally change.
I also added to the chart above the check point of horizontal volume indicator, Keltner channel upper border and its balance level.
In the weekly chart above, there is the strong support level, the trend upward line. The trend downward line is extending from above. At their meeting point, the lines form an equilateral triangle with an acute angle at about April 20.
For the future analysis of shorter timeframes, I marked Keltner channel’s borders in the weekly chart with purple beams. They are also the strong support and resistance levels.
As clear from the chart, they ticker is above the market balance level, and the yellow moving average is the strong support line. Taking into account that the ticker has closely approached the acute angle, it suggests that that the breakout from below is more likely.
In contrast to bullish sentiment in the main chart window, oscillators indicate a possible bearish correction.
There are no direct bearish signals, however, MACD is bearish and RSI, not having reached the overbought level, starts reversing.
These signs suggest that it is still too risky to enter a trade and bears can still go ahead.
The daily chart (see above), is in the bearish zone, rather than in the bullish one.
The price chart looks weak and unable to consolidate above the Keltner centre line. The previous highs haven’t been reached.
Oscillators indicate bearish sentiment. There are no divergences with the price, so the price is going to follow the general local trend.
The check point in the horizontal volume indicator and the weekly market balance level are at level 0.075. It is the strong support level and the magnet for the price, at the same time.
If we look closer, at 4-hour timeframe, we’ll see an even less clear situation.
In the chart above, there is rather bearish consolidation. RSI stochastic turns into a spiral in the window bottom half. It suggests a possible retest of the border at 0.075. Taking into account that bulls have strong support in the monthly timeframe, Ethereum has a potential to go up.
However, the triangle breakout is strongly limited at 0.081 and 0.085.
The ticker can hardly go higher in the general context of the market uncertainty.
To be more confident in the forecast for Ethereum, let’s compare it with the BTCUSD situation.
In BTCUSD 4-hour chart above, we see Bitcoin consolidating after the strong drop. Currently, it is inside the old downward channel, close to its top border. There can hardly occur a strong momentum after such a strong move. Most likely, there will be a try to press the ticker down to the support level at 6611 within the next few days.
If the level is held, the will be something like a double bottom. This pattern will encourage bulls to storm the former support level at 7000 USD.
The ETHBTC pair is inside the equilateral triangle.
The nearest target is the support level at 0.0751, it is highly likely to be reached by the price.
The nearest resistance level is at 0.08, it is likely to be reached.
Moving higher than 0.081 will enable the ticker to rise up to 0.085, it is less likely to be reached.
The most likely scenario looks like this:
The ticker will test the support level at 0.075 (purple level). If bulls support by a large volume of purchases, the price will reach the upper border of the giant triangle; there will be a small accumulation with a possible series of false rollbacks and breakouts.
If the price goes outside the triangle, bull will get the strong support to retest the local high, with an attempt to break through.
The next moves will greatly depend on the market state at that time. It is still very hard to suggest anything for a longer term, as the volatility is very strong.
I wish you good luck and good profits!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.