Ethereum price has managed to break above $215 today for the first time since November, 2018, securing an 8.09% gain. With the altcoin rally now underway, let’s take a look and see how likely the number two cryptocurrency will stay at this new psychological level during the rest of the week.
Ethereum Price Daily Chart
On the 1-day ETH/USD chart we can see that the asset is extending its meteoric rise towards the 0.786 fibonacci level at $218.59, after rejecting a bearish rising wedge reversal pattern.
At the time of writing Ethereum price is 00, with bullish traders working hard to defend the $205 support.
On the RSI, ETH has now entered into the overbought region above the 70% mark as bullish momentum continues to climb. This could place some selling pressure on the uptrend and slow Ethereum’s ascent to the next retracement level.
Despite this however, momentum on the MACD still appears to remain favorably bullish with the 12-MA bifurcating further away from the 26-MA, and buying volume showing increased strength on the histogram.
On the 4-Hour ETH/USD chart we can see a worrying trend contradiction between the RSI and the price action. Since May 11, ETH has made 2 significant higher highs including the most recent rally to $215, whilst tracking inside of an ascending channel pattern.
Despite this uptrend, the RSI has reported two lower highs which suggests that a bearish reversal could take place soon.
On the 4-Hour MACD, we can also see a decrease in buying volume on the histogram as well as the 12-MA starting to arc back towards the 26-MA below.
This could result in a brief correction, especially since ETH has broken into the overbought region on the 1-Day chart. If the asset breaks bearish through the ascending channel support at around $194, then there is a much stronger support further down at $178 which could provide bullish traders with a pushback opportunity.
The 30-Minute chart shows that ETH bulls are currently fighting to stay above the $205 support level, which has been a key S/R line during the past 48 hours.
Again, bullish momentum on the MACD is showing weakness with a bearish divergence between the 12 and 26 moving averages. The RSI has also broken below the 50% mark inside the index channel, as the current uptrend loses strength.
The Aroon Up line has also bearishly crossed below the Aroon Down line which gives us an additional confirmation that the short-term trend is likely to break downward.
From this, it seems that Ethereum bulls have lost some confidence after failing to breach the 0.786 fibonacci level during this morning’s rally.
The $205 support will be an important level to maintain if ETH is continue its parabolic move towards new highs.
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[Disclaimer: The views and opinions of the writer should not be misconstrued as financial advice. For disclosure, the writer holds Bitcoin at the time of writing.]
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