Technical Analysis and Market Entry: ETH/USD Subject To A Bullish Breakout

Ethereum
  • Ethereum price has recently been cooling following a return of bullish momentum. 
  • ETH/USD price action has formed a bullish flag structure via the daily chart view.

ETH/USD: Recent Price Behaviour

The Ethereum bulls have been forced to give up momentum over the last trading week, following a straight run higher of some four weeks. ETH/USD rallied over 47% from $122 up to the recent highs of $180. The price was able to hit the highest seen since 18 November. It was the most consecutive run higher since April-May 2019.

ETH/USD was able to produce a bottom out at the back-end of 2019, down the lowest levels since February 2019. Since hitting these lows, a foundation has been laid for a more significant recovery. It has been proven over the past few weeks. It comes following the heavy beating incurred in the second half of 2019, falling from heights of $363.

ETH/USD weekly chart.

Bulls To Break Critical Bearish Structure

The price, as detailed above, was within the firm control of the bears from June – December 2019. The market structure was very much bearish, with any rallies being sold and proving at the time to be vulnerable and short-lived. Following the peak in June, pullbacks were observed in; August, September, and November, all of which were sold.

Market bulls will need to break down the last extreme high, which was seen up at $225 on 16 September. A breach of this previous significant pullback would be a confirmation that this structure has come to an end. Given the promising signs with the current bull run, it does look encouraging for the move out of the downward trend.

Daily Chart View

Price action via the daily chart view has been cooling since 19 January; however, during this period a potential bullish formation has been constructed. A bullish flag pattern can be observed, which does appear to be subject to a breakout higher. The pole of the structure being the pump from 14-18 January.

ETH/USD daily chart.

Trade Recommendation

Given the current price formation, a buy position is looking increasingly attractive. An entry would be ideal around the current market price, although a breakout and closure above the flag are desirable. Another point of entry should ETH/USD continue to cool, for now, is sought at daily support, $152.00. Targets eyed at; $190, $215 and then $230. Stops would be placed at $149, just below the noted daily support.

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.