Ethereum Positioned for Strong Move Higher

2018年4月8日

Ethereum ETHUSD is sending some signs that buyers may be interested in her again. On the 4 hour chart, we can see that ETH has been battling a steep downtrend from earlier this year, but in April, we have begun to see higher lows and lower highs come in, indicating ETH is consolidating. Typically these consolidation patterns break with the trend. This would be expected due to the selling pressure sitting above the triangle, but this time may be different. The ADX-DI below (in both traditional at the bottom and Chris Moody's version above it for ease of reading with green bars being bullish and the height of the bar indicating strength of the trend) made a bullish DI cross yesterday, and the white trending line is basing below 20 and rising, seen as light green bars that are increasing in size on Chris Moody's indicator. This often indicates strength is building for an explosive impulse move higher. Overnight, we saw ETH breakout through the 50 ema (bright red) for the first time, just as the previously resistant moving average exited the triangle. We are now re-testing the top of the triangle and trying to form a hammer above it. If this candle closes like this, we should expect buyers to return to ETH and attempt to break through the previously-tested resistance zone in the low 400's over the next few days. We have already tested and rejected out of this area three times, so expect some selling to occur there, and watch for further consolidation inside or just above the pink zone on the chart such as a bullflag to indicate that buyers are re-gaining control.

To play devils advocate, we have an overbought Laguerre PPO and bearish divergence on the RSI. Typically, the bearish divergence alone could be overcome by price making a higher high (around 420 in this case). However, with an overbought PPO, this kind of an impulse move will be difficult to sustain. If we get a severe pullback, the ADX-DI could make a bearish cross, which could bring us all the way back to support around 370. I wouldn't be surprised to see the faster moving averages re-tested (currently around 286 but trending up) before we make the big push higher. Watch for it to occur as they exit the triangle. If it does play out this way, getting long on the bounce off say the 4hr 20 ema could be wise if you don't want to wait for the breakout. Sideways movement here is to the bulls advantage, as this will allow the PPO to settle down. I'd like to see RSI stay above the 50 line once we break the previous high around 400. Otherwise, we may not quite be ready to breakout. Once we do breakout, I would be inclined to buy a dip or retracement, especially if the zone around 400 holds from a test above. 1st Target would be somewhere between 430-450 where we can anticipate sellers to be waiting from the pullback in mid March. If this breaks, 500-520 could be on the horizon very quickly.