Ethereum expects positive movement after breach of falling wedge pattern
After a significant decline on 25 November, Ethereum’s valuation has undergone sideways movement over the past week. The 2nd largest crypto-asset has consolidated between the valuation of $140 and $160, without registering a steep hike or slump.
However, the long-term trend suggested that the price may record another bullish phase in the near future. At press time, Ethereum was valued at $149.16.
The 1-day chart for Ethereum registered a steady decline over the last couple of months. However, under observation, the price movement of Ethereum exhibited a falling wedge pattern. ETH’s price registered prominent higher lows at $220.95, $190.93 and $182.31, whereas strong lower lows were observed at $169.40, $154.09 and $140.49. The formation of a falling wedge indicated the higher possibility of a bullish breakout for Ethereum over the next few weeks.
At press time, the immediate resistance of Ethereum was placed at $169.40 and $179.61. However, these resistances were unlikely to be breached successfully without price corrections.
The declining trade volume also confirmed the validity of the pattern.
In order to estimate the immediate resistance for Ethereum, Fibonacci retracement lines were taken into consideration. The retracement lines suggested that after the bullish breakout surfaces, strong resistance will be observed at $153.97, followed by resistance at $167.21. Market momentum was extremely low at press time and hence, a prominent breakout may not surface unless the price pump is backed by massive buy-in volume.
The MACD also indicated a bearish trend at press time, but the MACD line remained in close proximity with the signal line, indicating an imminent trend reversal.
After weeks of consistent decline, a bullish pullback is a major possibility over the next few weeks. It will be interesting to note the bullish momentum going forward into the last month of 2019.