Ethereum Price Analysis: ETH/USD Subject to an Extended Breakout Higher

 

  • ETH/USD price action has formed a bullish pennant via the 4-hour chart view.
  • Ethereum network hard fork scheduled for January 16th 2019, but still subject to potential change.

ETH/USD price action has cooled since the recent bull run. This isn’t too surprising given the fast gains seen initially and the touted profit-taking following the explosive move north. A technical move appears to be the case across much of the market. Price action looking ready to breakout again.

Ethereum News Flow

The developers at Ethereum have now set a new date of January 16th, 2019, for their scheduled hard fork of the Ethereum network. This came at the back end of last week, on their bi-weekly call, where they discuss anything relating to the blockchain technology.

It was detailed that this agreement made via the call was non-binding verbal, leaving room for that date to still be moved, should any issues or problems come to light. Hacked’s Sam Bourgi covered in a recent crypto market update.

As covered in October via Hacked, Ethereum’s software upgrade saw a failure. The hard fork that they had been working on did not activate on their test network Ropson. This was largely anticipated to have been activated in November. As a result, they were forced to delay.

Technical Review – ETH/USD

ETH/USD daily chart

ETH/USD price action has been cooling, after failing to break above vital resistance seen around $220-225. This is in proximity to the 61.8% Fibonacci. Over 6% has been lost after the decent advances seen from 30th October, breaking out from pennant pattern.

The price was initially contained within the mentioned pattern since September. Bulls however gained some upside momentum at the back-end of October, seeing a breakout to the upside. ETH/USD had gained over 15%, up to the high print on 7th November, just above $225.

At present ETH/USD is somewhat magnetized to the 50% Fibonacci, hovering around the $210 price area. Clearly it has re-entered consolidation mode after the surge higher last week. This type of behavior is typically seen following on from explosive moves.

4-hour Chart View

ETH/USD 4-hour chart

Looking via the 4-hour chart breakdown, given as mentioned above, the current consolidation state, a bullish set up has formed. A bullish pennant pattern, as a result of the cooling from the high area on 7th November has formed.

Near-term resistance is eyed between $214-215, the upper trend line of the pennant. A breach above, will likely see a retest of the 7th November high. Further north, a strong area of supply can be seen running from $230-235.

ETH/USD faltered in the above supply area on several occasions, from 27th September up until 10th October. Lastly, in terms of upside, $250 would be a target for the bulls. The price hasn’t been up at these heights since 21st September, where it encountered strong sellers.

To the downside, immediate support is eyed around $210-208, the lower trend line of the pennant pattern. Any breach here, could very well see a fast move back down sub $200, buyers are seen around $195.

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.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.