While the Ethereum (ETH)/USD pair is struggling to hold on above support, the ETH/BTC one is showing strong signs of an impending breakout.
ETH has been decreasing since reaching an all-time high price of $4,867 on Nov 9. The decrease led to a low of $3,960 on Nov 18, before the token bounced. It created a long lower wick (green icon), which is considered a sign of buying pressure.
The wick transpired inside the horizontal $4,180 support area. This is a crucial area, since it previously acted as the all-time high resistance. Therefore, the current decrease looks like a re-test after a breakout.
The next support area is at $3,650. This is the 0.382 Fib retracement support level.
The shorter-term two-hour chart shows that ETH has broken out from a descending resistance line and validated it as support afterwards (green icon).
This is another bullish sign, that suggests the short-term correction has come to an end.
Cryptocurrency trader @Pentosh1 outlined an ETH/BTC chart, stating that the token could go all the way to ₿0.1
The daily chart shows that ETH is trading inside a symmetrical triangle. It has been doing so since May 13.
While the triangle is considered a neutral pattern, it is transpiring after an upward movement. Therefore, a breakout from it would be more likely than a breakdown.
Furthermore, technical indicators support the continuation of the upward movement.
The MACD, which is created by a short- and a long-term moving average (MA) is positive and moving upwards. This means that the short-term MA is moving at a faster rate than the long-term one.
Furthermore, the RSI, a momentum indicator, is above 50 and increasing. This is a sign associated with bullish trends.
The wave count also indicates that ETH/BTC is in wave four of a five wave upward movement. Wave four most often takes the shape of a symmetrical triangle. After the triangle is complete, another upward movement would be likely, which would take ETH towards new highs.
The1.61 external Fib retracement level on wave four provides a target of ₿0.099, aligning with that from the tweet.
For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.
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