Ethereum Price Analysis: ETH/USD Bullish Breakout from Descending Channel
- The ETH/USD bulls forced a breakout to the upside from a descending channel formation.
- The next barrier is eyed within the $130 territory, further north eyes would be on $150.
ETH/USD is on its way to the north following a convincing recovery on Wednesday. This comes after a bottom had formed ahead of the big psychological $100 level. Bulls were heavily defending this area between 25-27th November. At the close of the daily candle on Tuesday 27th, ETH/USD managed to finish in the green, forming a reversal looking doji. The price within most of the session initially on Tuesday was very much weighted to the downside. However, a late surge was seen across the board, triggering a wave of green for the cryptocurrency market.
The price had been moving within a descending channel formation since 20th November. Over that period, price moved aggressively to the downside, with ETH/USD well confined within. As mentioned above, a jump higher was seen towards the latter stages of trading on Tuesday, as a result, the bulls broke out to the upside from the mentioned bearish channel. The move was extended higher during the session today – Wednesday. Given the breakout, it should not be ruled out for the price action to play out to the textbook, seeing a breakout and then retest before further moves north.
The next major barrier for the bulls to attempt a breakdown is seen heading into the $130 price territory. The ETH/USD pair last traded here just 4 days ago on 24th November. Resistance could likely be seen from $126-$130. This area had previously served as a near-term demand zone between 20-21 November, before being breached on 22nd. Above this area, there isn’t too much in the way of seeing a return up to the $150 territory. The price last traded here on 20th November, before entering the descending channel formation.
As earlier noted, there is potential for a retest of the breached channel formation, following the breakout higher. Should the pullback be seen, the support on top of the pattern is tracking around $107.80. A move back to this level could further ignite a decent wave of buying interest, completing the technical set up by the textbook. Any failure to hold here and investors can expect the psychological $100 mark to come under threat. The next likely area of safety would be seen at the lower trend line of the channel, which would be around the $89 mark.
Disclaimer: The author 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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