Ethereum surged from its lows of May 11. Since the previous week, ETHUSD gradually yet steadily rose. It gained more than 15% in the last week alone.
Ethereum’s rise brought a much-needed respite for its investors, especially since the stock markets seemed to be on a freefall. On the technical front, Ethereum appears to be breaking out of a long-term triangle pattern.
ETHUSD: Price-action triangle pattern explained
Source: TradingView.com
The daily range for ETHUSD is $209.22 — $215.00. If we look at the daily-timeframe and draw trendlines, it would look something like the chart given.
The trendlines cover the peak in February and all the subsequent declining peaks. The other trendline catches the most profound drop in March and the higher lows after that.
ETHUSD is currently trading at $211.75. Ethereum would soon come out of the converging triangle. It will be a significant move as moving out of this trend with large volumes will provide a much higher momentum to Ethereum.
Technical outlook and price movement analysis of ETHUSD
Ethereum formed a Golden Cross pattern on May 14, when the 50-day moving average crossed over the 200-day moving average. A Golden Cross generally has significant upside potential, in case the pattern is formed with large volumes. However, in this case, the traded volumes were pretty low.
Ethereum looks all set to soon break out of this pattern, towards the upside. However, there’s more than a probable chance that ETHUSD won’t make any significant positive movements.
There are multiple reasons as to why ETHUSD might, in fact, break out of the pattern and start declining:
- The volume traded continues to be quite low. The rise of BTCUSD mostly fuels Ethereum’s gains.
- With lockdown restrictions getting lifted, the economy is set to come back on track. And stock markets are rising on the hopes of an economic revival.
- Stocks might be risky assets. However, the perceived risk associated with stocks is much lesser than cryptos.
The crucial resistance would be at $239.24, and the support is at $196.37.
