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Ethereum has been trading in close tandem with Bitcoin throughout the past several days and weeks, and this correlation isn’t showing any signs of breaking.
It now appears that buyers may be laying the groundwork for ETH to see a notable upswing, however, as the crypto is currently on the cusp of breaking above a crucial support level.
Much of this strength could come from the buyers’ continued ability to hold it above $238.
One analyst is noting that he is now closely watching to see how ETH responds to the resistance that sits around $246. He explains that a firm break above this level could spark an intense rally that leads it towards the upper-$200 region.
Ethereum Buyers Attempt to Defend Crucial Support
At the time of writing, Ethereum is trading down marginally at its current price of $237.
This is around the level at which it has been trading throughout the past several days and weeks, with buyers struggling to garner any clear momentum in either direction.
This sideways trading is mostly the result of Bitcoin’s prolonged bout of consolidation within the lower-$9,000 region.
Until BTC gains some clear momentum, it is highly likely that Ethereum will continue consolidating as well.
One crucial level to watch in the near-term is $238, as bulls have ardently defended this support in recent times.
It now appears that this level is at risk of being broken.
If Ethereum closes its daily candle below here, it could be a sign that it will drift down towards the lower boundary of its trading range around $130.
Assuming that it can end the day above this level, one analyst is noting that $246 is the resistance level that must be shattered to fuel a breakout rally.
“ETH LTF Update: For the past 7 days it seems bears have failed to break back below $238 with any conviction, thinking we are currently in mini accumulation before another leg up… If bulls can take out $246 then momentum should take us a lot higher, expecting a breakout soon.”
Image Courtesy of Cactus. Chart via TradingView.
ETH’s Macro Outlook Against BTC is Incredibly Bright
As NewsBTC reported last week, analysts are widely bullish on Ethereum’s macro outlook against Bitcoin.
One prominent Ethereum skeptic cited in the report even noted that he is long on ETH/BTC despite believing ETH has “extremely problematic fundamentals.”
“ETH/BTC technicals are looking bullish so I’m long. (I still think ETH has extremely problematic fundamentals.)”
Image Courtesy of Tuur Demeester. Chart via TradingView.
How Ethereum reacts to $238 in the coming days should also provide some insight into the validity of its overt strength against its Bitcoin trading pair.
Featured image from Shutterstock. Charts from TradingView.
