Ethereum might be done with its slide as it forms an inverted head and shoulders reversal pattern on its 1-hour chart. Price is still testing the neckline and a break higher could spur a rally of the same height.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. Price is holding on to the 100 SMA dynamic inflection point and the 200 SMA is just close by to add another layer of support.
A break above the $145 resistance could lead to a climb to the previous highs around $170 or a move that’s at least the same size as the reversal formation, which spans $125 to $145.
RSI seems to be on the move down, though, indicating that selling pressure is in play. Stochastic is also moving south so price could keep following suit, but this indicator is nearing the oversold region to signal potential exhaustion. Turning back up could indicate that bulls are ready to charge again.
There haven’t been a lot of developments on the ethereum front in the past few weeks or even the cryptocurrency industry as a whole, which explains the current consolidation. Traders are still waiting on updates on institutional inflows, which are widely expected to usher in big volumes and stronger volatility that could sustain trends.
It doesn’t help that ethereum is being surpassed by some rivals like Tron in terms of transaction volumes. Still, analysts like Joseph Lubin of Brooklyn-based Consensys says that ethereum is a strong buy at these levels. In a speech in Austin he said:
“Ethereum 2.0 is launching soon. We have eight teams working currently on Phase 0 of the four phases of the roadmap. We will further develop the base layer of the Layer 2 expansion solution, which will be in the next 18- at least 1000 times in 24 months. Once this completes, Ethereum will continue to expand. Since the start of the ecosystem in 2009, Ethereum has seen many incredible rises in the price of the tokens followed by many corrections. One of the significant corrections was done in 2018, which was 5,000-times more valuable than when ETH was initially launched.”