Technical Analysis and Market Entry: Ethereum Bulls Extend Out of Bullish Flag Pattern

  • Ethereum is running with decent momentum to the upside; it has been rallying for going on seven consecutive weeks.
  • ETH/USD must break and then hold above $200 for further upside pressure.

ETH/USD: Recent Price Behaviour

The Ethereum price direction is well within the control of the market bulls, making a substantial advance to the north. Upside momentum has been in play since the start of 2020; a price recovery looks promising for ETH/USD. It has managed to push itself back up to trading at three-month highs. The psychological $200 price mark is within reaching distance of the bulls, of which ETH has not traded above since September.

A jump of some 56% has been observed since the commence of the year, this rally is somewhat reminiscent of 2019. Although, the current push higher is proving to be more consecutive and even dwarfing the gains of last year. In 2019, from January to the start of February, ETH/USD only advanced at the time some 20%, compared to the current run higher.

ETH/USD daily chart.

Weekly Chart View

The bulls are breaking down a bearish market structure; the lower highs formation has been voided and continues to be. Firstly, the high area of late November – early December was broken down around $150. Now, ETH/USD bulls are tackling the high region seen in October-November around $190 – $195.

ETH/USD is running towards its seventh straight week in the green, which marks the most consecutive run since April-May. During the noted period, the price has risen from depressed levels of $121 up to the recent high print at $195. There is a lack of signage that this current move will be slowing down anytime soon.

ETH/USD weekly chart.

Daily Chart View

The price was moving within a bullish flag structure via the daily chart view, between the 18-25 January. A firm breakout and closure above were observed in the following session, 26 January. Market bulls have been running to the upside, playing out to the textbook with the breach and extension higher.

ETH/USD is now trading within a known area of supply, running from $180 up to $195. The price has dealt with several rejections throughout October and November 2019. Failure to break above, as seen previously, would force the price back down to $140-120 territory. The noted area is where Ethereum had bottomed at the back end of 2019 and kick-started its recovery this year.

Trade Recommendation

Given the described upside momentum that is being observed, buy positions remain attractive. In terms of entry, this would be ideal upon a breakout and retest of the noted $180-195 price region via the daily. Targets eyed at; $220, $250 and then $280. Stops to be placed just below the zone at $175.

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.

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.