Ethereum has made a new high this week by reaching $746, but it has to break $800 to turn parabolic. In the short term, an unsuspecting trendline now controls the fate of ETH which may have to range before making a higher high.
All technical indicators show that the leading altcoin is bullish, but can investors ignite a streak of volatility comparable to Bitcoin? To achieve that, we definitely have to break a troublesome weekly resistance level.
Price data from CoinGecko reveals that Ethereum grew 19.3% in the past seven days, The sudden spurt of activity implies that altcoins are ready for another altseason.
If January truly turns into an ‘altseason,’ investors who have profited from Bitcoin will highly likely put all of their new money into smaller cap cryptocurrencies.
But for that to happen, bulls need to show their strength by taking control of the previously mentioned trendline. It has directed prices since December 24 on the hourly timeframe, acting both as support and resistance.
This morning, ETH fell under the trendline but has recovered nicely after bouncing at $688. In order to flip the trendline again, Ethereum must break above $736.
The cryptocurrency has already been rejected on its first attempt. We can expect for ETH to range for several hours before trying to make another move. But whatever happens, the sole objective remains clear: bullish investors have to break the key price area at $735.
On lower timeframes, Fibonacci lines show that there are plenty of tight resistance and support levels in this range. Prices have retraced to $686 after failing to go beyond $747.
At the time of writing, ETH holds 0.236 at $718 as support. This support line may help the asset range and consolidate for the next 24 hours before attacking the high again.
Ethereum faces first strong resistance level at $800
The short-term situation looks brilliant for ETH bulls. But what most investors should be aware of is an upcoming weekly resistance level from which we might harshly reject.
Ethereum had a parabolic uptrend since the crash in March. In the coming days, $800 might act as a strong resistance that can challenge the trend.
The area between $830 and $870 behaved as a supply zone on two separate occasions. The market has rejected ETH for the first time on December 11 at that level, after which the asset retraced a week’s worth of price performance. Near the end of April 2018, Ethereum has yet again failed in surpassing that zone which led to a very bearish year.
Weekly RSI also appears bearish at the moment. We are about to hit an RSI level which was last seen when Ethereum made an ATH in January 2018.
With the aforementioned factors in mind, we can conclude that ETH’s lucky streak may end as we approach the first troublesome area.
If Ethereum is instantly rejected at $800, the digital asset would surely range for at least a full month before making a final decision. There is currently a lot of demand for ETH, so it will not be hard to bounce from certain demand zones. Nevertheless, traders should still be wary of having overleveraged positions.