Crypto Price Analysis: Ethereum Just Turned Ultra Bullish
If you’ve been following our Five Altcoins to Watch This Week series, you’d know that we’ve been watching Ethereum (ETH/BTC) for quite some time now. In that article, we mentioned how Ethereum is a ticking time bomb waiting to explode. All the crypto needs to do is to take out its diagonal resistance. Today, that hurdle has been finally cleared.
With the diagonal resistance out of the way, Ethereum has one of the most bullish charts, if not the most bullish charts, in the cryptocurrency world. In this article, we reveal how Ethereum just turned ultra bullish.
Ethereum Accumulation one of the Longest in Crypto
While many chartists look for patterns and trends to look for profitable setups, some of the very best look at how an asset builds its base when starting a new market cycle. The base building process reveals the intentions of the smart money. This is why there’s a saying that goes, “the longer the base, the higher the space.”
If the smart money is building a strong and lengthy base, it often means that these entities (smart money investors) will eventually have to dump all of the accumulated positions at the top. To maximize profits, the pump has to be astronomical so they can effectively distribute positions on the way down.
In Ethereum’s case, the market has been range trading in accumulation between 0.025 and 0.041 for 286 days and counting. This means that the smart money has been buying within this range for over nine months now. That’s one of the longest accumulations we’ve seen in cryptocurrency.
To put this in perspective, Litecoin (LTC/BTC) spent 185 days in accumulation, Bitcoin Cash (BCH/BTC) spent over 130 days, and Binance Coin (BNB/BTC) spent over 205 days. These three coins are looking mighty bullish now but none of them came close to Ethereum’s accumulation in terms of length.
Ethereum Inverse Head-and-Shoulders Breakout
Just today, Ethereum took out the diagonal resistance that has kept the market bearish for six months. In the process, the cryptocurrency broke out of an inverse head-and-shoulders pattern on the daily chart.
Currently, the market is facing some resistance from the 100-day moving average (MA) and 200-day MA. Thus, we can expect a quick retest of the diagonal resistance as support before the cryptocurrency pulls off a massive disbelief rally.
We believe that bulls will hold their new ground because the daily RSI is flashing bullish signals. It breached resistance of 50, retested it as support, and now trading above it. We might see similar movements in terms of price action.
Long-Term Technical Indicators Looking Bullish
Even on the longer timeframe Ethereum is giving us ultra bullish signals. A look at the weekly chart shows that the RSI has converted resistance of 40 into support. This is a strong sign that bulls are gaining significant bullish momentum.
On top of that, we see Ethereum post the second largest weekly volume (week of May 13th) on its historical chart on Binance. This significant volume spike is often an indicator that the market is in the latter stages of base building.
If you agree with our technical analysis, Ethereum is now a buy on dips candidate. Once the cryptocurrency begins its breakout rally, it will likely immediately target range high of 0.041. Above that is where the real fireworks might begin.
Disclaimer: The writer owns bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
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