Warning: The conclusions of the following analysis are the sole opinions of the author and should not be construed as investment advice.
Ethereum, the king of the altcoin market, recently saw a dramatic rise in price charts thanks to Bitcoin’s bull run. At press time, Ethereum had reached a price point of $ 743, a price point last seen in May 2018. Clearly, unlike Bitcoin, Ethereum did not hit its ATH 2017, with ETH having still need an 87% raise to do so.
At the time of writing, Ethereum is facing a level of resistance that could easily be invalidated if the buying pressure continues.
Ethereum 1 week chart
Source: ETHUSD on TradingView
As mentioned earlier, Ethereum invalidated a few bearish signals just like Bitcoin did. This was mainly due to buying pressure from institutions, coupled with the drying up of sell-side liquidity and retail FOMO. It seemed like the perfect concoction for a parabolic price spike.
Ethereum was sticking to the ascending channel pattern over the weekly period and is expected to hit a high at $ 624 and $ 655. However, buying pressure and FOMO contributed to the price breaking through that glass ceiling and up to $ 747.
What seemed even more interesting was that the press time level was just below the 0.5 Fibonacci level of the Fibonacci tool based on the trends spanning from the December 2017 highs to the lows seen in December 2018, and finally back to the last high of $ 756. . Thus, the level of 0.5 to 750 $ will be a formidable resistance for the price of the cryptocurrency in the short term.
On the issue of cryptocurrency indicators, the RSI was oversold for almost 49 days in the weekly period, while the OBV showed a steady increase in volume.
Finally, while the stochastic RSI [adjusted] was heading towards the overbought zone, the stochastic RSI attempted to break out of the overbought zone.
Conclusion
If the buying pressure of Bitcoin decreases, we will see a domino effect, an effect that will lower the price of Ethereum. Thus, any projection of the price of Ethereum can be characterized as “cautiously optimistic”. Additionally, given that Ethereum is following Bitcoin closely, it could also face a correction soon, and when that happens we will see some heavy and long liquidations. The price could drop 20% and go back below $ 600.
