My short call on Ethereum completely bombed! Ethereum has soared 5.6 percent to 0.00208BTC, mauling the short sellers in a surprise jump. I was anticipating a decline to 0.0019BTC but Ethereum instead rose to hit a high of 0.0021BTC.
With this, Ethereum has approached the strong resistance level of 0.0021BTC with confidence. Beyond this hurdle, the pair will appreciate roughly 10 percent.
The ETH-XBT pair has formed an inverse head & shoulders pattern; a technical bullish pattern successful completion of which brings huge gains for the underlying. Today, we will discuss the best-case and worst-case scenarios for Ethereum using the technical indications from the 240-minute ETH-XBT price chart from KRAKEN.
Chart Structure – The chart image presented above clearly tells that bulls are challenging the resistance at 0.0021BTC with strong optimism. The level is the neckline resistance of the Inverse H&S pattern. The primary target objective can be calculated by adding the depth of the technical pattern above the neckline resistance which puts the target at 0.0021 + (0.0021-0.0019) = 0.0023BTC.
If bulls fail to cross this blockade, then profit booking will once again drag the price down to sub-0.0020BTC levels.
The last bullish candle was supported by a surge in volume as well.
Momentum – The Momentum indicator has finally reached the positive territory with a value of 0.0001.
Money Flow Index – The MFI is adding to the gains achieved in the previous session. The current value of the MFI is 67.2578.
Relative Strength Index – The latest RSI value is 61.7752, indicating a surge in bullish strength.
It seems like the force has awakened (yes, I know you got me there!) for the bulls. But cryptocurrency pairs are full of surprises, and there could be negative shocks as well.
One thing that doesn’t augur well for the bulls is that the pair is already trading at the upper end of the BB, and therefore, profit booking may come in.
Remain cautiously optimistic on Ethereum.