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Ethereum’s rally running on fumes, a revisit to $168 on the horizon

Akash Girimath

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Ethereum's rally running on fumes, a revisit to $168 on the horizon
Source: Unsplash

The second-largest cryptocurrency aka Ethereum [ETH] has pumped more than 7% in the last 4 hours or so. In terms of BTC, it has pumped by 4.25% making 1 ETH equivalent to 0.0202 BTC at press time. However, this rally is running on fumes and is bound to head lower in the upcoming day.

Pumping on Fumes

Ethereum's effervescent rally must end; a revisit to $168

Source: ETH/USD TradingView

The 4-hour chart for Ethereum showed the formation of a bearish rising wedge pattern with a current age of 18+ days. As the price nears the narrow-end of the wedge, the breakout becomes more palpable. As for the breakout, the price will take a tumble from its current seating at $191 to a low range of $170 to $168. Supporting this collapse, to an extent is the 200-DMA [purple] which is below the price, for now; there will be another retest of this important level, currently at $178.

Ethereum's effervescent rally must end; a revisit to $168

Source: ETH/USD TradingView

In addition to the 200-DMA, the collapse is supported by the OBV which shows a plateauing after hitting a volume peak at $777,000. Furthermore, the RSI has also hit the overbought zone at press time, indicating a bounce lower from this point.

Bitcoin and Ethereum’s Tango

Ethereum's effervescent rally must end; a revisit to $168

Source: CoinMetrics

Since Ethereum is the second-most successful cryptocurrency in terms of market cap, there is bound to be a direct correlation between these assets. However, the correlation [180-day] seems to have plateaued since hitting an ATH of 0.89 in July 2018. Since then the correlation has varied between a band ranging from 0.89 to 0.75. At press time, however, the correlation stood at 0.82, a relatively higher correlation.

ETH/BTC

Ethereum's effervescent rally must end; a revisit to $168

Source: ETH/USD TradingView

As mentioned in a previous article, Ethereum managed to hit a low range between 0.0186 BTC to 0.0183 BTC. This lower-range breach confirmed the breakout of the rising wedge pattern. Since this breakout, the price has managed to surge by a total of 9.75% in terms of BTC and shows no sign of stopping.

Conclusion

The price of ETH in USD or BTC looks bleak. In terms of USD, the price will drop to a low range of $170 to $168 after breaching the 200-DMA on its way. In terms of BTC, the price has hit a ceiling at 0.0203 and seems to be heading down, possibly to 0.019 BTC.

Akash is a full-time cryptocurrency writer and an analyst at AMBCrypto. He is an engineering graduate with an avid interest in finance and economics. Attracted to the chaos of trading, Akash has invested in BTC, ETH and XRP for educational purposes.

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