Ethereum (ETH): from the rise to The Merge?

Pump it up – A few months before The Merge update, Ethereum is 73% back to its all-time high. We imagined a flamboyant year 2022 for the eternal second cryptocurrency but, for the moment, it is a complicated winter. There are a few months left before the update to make us dream, but would it be possible to see a new all-time high for June 2022? Let’s technically analyze the creation of Vitalik Buterin.

This analysis of the Ethereum price is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.

Ethereum is still in an uptrend against the dollar

Ethereum in weekly timescale

Chart of Ethereum against the dollar (1W)

Ethereum is trending bullish according to the Dow theory. The Dow Theory holds true as long as the asset is making bottoms and rising tops. In addition, the structure built during the summer of 2021 is solid. A few weeks later, Ethereum made a new all-time high at $4,870. What follows is a fall of more than 50%.

The local top was made on a so-called “V top” structure. It’s a structure brittle who is to be tested again. A “V top” is often transformed into a double top in the event of a bearish market or a new high if the market remains bullish.

Of course, no one knows today if Ethereum will make a new ATH in the coming weeks or if it will enter a bear market. This is why it is necessary wait for confirmation.

Momentum could turn bullish in the event of a breakout 46 of RSI. This would show a certain breathlessness of the sellers. There is still room for the RSI before rubbing shoulders with the two trendlines (black). It is resistors non-negligible for the weeks to come.

Ethereum fibonacci extensions zones on the chart of Ethereum against the dollar in Weekly scale
The Fibonacci extension zones in case of formation of a bullish or bearish structure (1W)

At the moment, Ethereum is stuck between $3,290 and $2,160. As long as the price remains between these two limits, it is impossible to know the direction of the market. A break of $2,160 would lead to a bearish structure with a search for cash placed under $1,700.

Fibonacci extensions 1.618 and 2 are very interesting statistically. In case of breakage of $2,160the price should move between $1,450 and $1,020. On the other hand, if Ethereum manages to overcome the resistance to $3,290the price should move between $4,000 and $4,030. This is also the shorts reload area, where sellers can come forward.

Ethereum daily

Ethereum is in compression, a strong move is coming.
Chart of Ethereum against the dollar (1D)

In the daily timescale, Ethereum is in a strong contraction. A contraction results from a balance between buyers and sellers. The price can no longer make troughs and ascending peaks or troughs and descending peaks. The lesson no longer takes a clear direction.

Momentum is bullish thanks to breakouts 50 and 55 of RSI. The momentum seems to be coming out of its contraction from above, this may be an indication for the future.

From a technical point of view, it will be necessary to overcome $3,300. As long as this resistance is not crossed, the price can remain in a range between $3,300 and $2,300. There are encouraging signals with an interesting momentum and a “W” on a daily basis, but it is still not enough.

Ethereum versus Bitcoin

Comparing Ethereum to Bitcoin is very interesting for several reasons:

  • Find out who will outperform the other. It may be interesting for the Portfolio Management. Indeed, Ethereum has outperformed Bitcoin since the beginning of 2020. It was therefore more interesting to have a larger percentage of Ethereum than Bitcoin in your portfolio until today.
  • Know the tendency altcoins. Indeed, Ethereum is the leader of altcoins. If Ethereum does well, altcoins follow.

Here is the chart of Ethereum against Bitcoin in weekly time units:

Chart of Ethereum against Bitcoin
Chart of Ethereum (ETHUSDT) against Bitcoin (BTCUSDT) (1W)

Ethereum has outperformed Bitcoin since the start of 2020. Since then, it has freed from the first stop (0.382 Fibonacci retracement). Currently, and for a few months now, the reloading area is resistance (0.618-0.786 Fibonacci retracement). Admittedly, this zone is resistance but the ETHUSDT/BTCUSDT pair remains bullish for the moment. Structures at the contact of the short reload zone are bullish.

The RSI momentum is rather bearish with this discrepancy confirmed in weekly time units, which indicates the consolidation. A divergence does not mean the end of the movement but rather that the buyers are doing pause to regain energy.

Ethereum against Bitcoin in 2-day scale:

Price of Ethereum against Bitcoin on the two-day scale.
Price of Ethereum against Bitcoin (2D)

In this unit of time, we can clearly see the bullish channel which is drawn by the course of Ethereum against Bitcoin. Each time the price reaches the bottom of the channel, we rebound. In addition to this, the bearish trendline (black) is giving way with a confirming RSI momentum. There is a good chance of finding the course again middle of the channel even in top of channel. All lights are green for Ethereum against Bitcoin.

At the moment, there are not really any alarming signs on the side of the second capitalization of the crypto market. Of course, it will have to be confirmed in the weeks and months to come. Ethereum has outperformed Bitcoin for several years already and the technique seems to confirm this for the weeks and months to come. A famous phrase in the world of the stock market says: “Buy the rumour, sell the news” (Buy the rumor, sell the news.). With this in mind, one could imagine that Ethereum could start rising again until the date of the update The Merge, in June. Of course, there are no certainties in the stock market, cryptocurrencies and investing in general. See you in June to take stock.

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