Since bottoming in the mid $300s, ETH-USD has managed to almost double in price over the course of a month. The support at the bottom came from the top of the previous reaccumulation trading range shown below:
Figure 1: ETHUSD, 12-Hour Candles, Previous Trading Range
Whether this is nothing more than a brief respite in an overall downward trending market remains to be seen. There are several very bullish factors to consider:
Figure 2: ETHUSD, Daily Candles, Macro Support
We managed to break through the daily candles’ 50/200 EMAs. We are currently sitting on top after a successful test of support a few days ago. For now, the 50/200 EMAs are proving to be strong support.
Next, the rally off the $350 support area showed a high amount of volume indicating demand is returning to the ether markets. The rally off support broke the downward trend where we are currently consolidating in a substantial bullish pennant:
Figure 3: ETHUSD, 6-Hour Candles, Bull Pennant
A pennant of this size has a measured move of approximately $200. If we manage to breakout and rally, we should expect to see a price target of approximately $850. The breaking of the downward trend is a very bullish signal as it represents a loss of downward momentum and the potential beginning of a new, sustained, upward trend.
At the moment, ether is looking very strong. If we manage to find support on the lower trendline of the pennant, that will give us increased confidence in a continuation of the up trend. With the market currently sitting on many levels of macro support, it will take a lot of effort to push back through the established support levels.
Summary:
- After finding support on the previous, macro trading range, ether managed to rally right through the downtrend
