On Tuesday, the crypto market mounted a strong recovery, with the prices of Bitcoin, Ethereum (ETH), and other digital assets strongly bouncing off the weekend lows.
At Tuesday’s local peak, BTC was trading 8.4% higher than the weekend low of $9,500. And Ethereum had rallied some 20 or so percent from the weekend low.
While impressive, the rally in ETH stopped just short of $290, which is where last week’s surge topped out as well.
The fact that the cryptocurrency failed to break through the resistance twice led some to argue that Ethereum had “double-topped” and was poised for a steep retracement.
Indeed, as can be seen in the chart above, the rally paused and reversed just under $290 on two (or three) occasions.
Ethereum Didn’t Double Top
According to Mohit Sorout, a partner at Bitazu Capital and noted crypto analyst, Ethereum’s chart did not print a double top, despite the chart above.
He pointed to the information seen below to back his point, which mentions that true double top patterns need to satisfy a number of criteria to be deemed truly bearish:
- If the two tops are “quite close together in time and with only a Minor Reaction between in,” it may not be a double top but consolidation instead.
- If the retracement from the first top is rounded and long, “it’s not a true double top.”
- The retracement should be at least > 20% from the first top high.
$ETH chart is not a double top you baboons pic.twitter.com/1suUqLoRpX
— Mohit Sorout 📈 (@singhsoro) February 19, 2020
Per Ethereum World News’ analysis of the chart, only one of the conditions for a valid double top were met, suggesting that ETH should have the capacity to surge past $290 should bulls step in once again.
Price Outlook Bullish
Not only has Ethereum not double-topped from a chart perspective but it is also showing signs it is ready to surge even higher.
Financial Survivalism, the trader who called Bitcoin’s surge to $9,000 at the start of 2020, noted that Ethereum has just “confirmed an inverse head and shoulders” bottoming pattern when it surged yesterday.
The measured move of this bullish chart pattern, marked by a strong trend higher after a bottoming process, is $305 — 8% above the current price of $282.
Not to mention, Ethereum’s market dynamics are purportedly looking relatively bullish with the “average ETH trading volume during the past week [being] four times larger than the average volume for the second half of 2019,” as pointed out by macro analyst and crypto commentator Alex Krüger.
The average $ETH trading volume during the past week has been 4 times larger than the average volume for the second half of 2019. Somebody has been buying a lot of $ETH. pic.twitter.com/haWJ4JO6W0
— Alex Krüger (@krugermacro) February 18, 2020
Photo by Matthew Hicks on Unsplash