Since bottoming in the mid $300s, ETH-USD has managed to almost double in price over the course of a month. The support at the bottom came from the top of the previous reaccumulation trading range shown below:
Figure 1: ETHUSD, 12-Hour Candles, Previous Trading Range
Whether this is nothing more than a brief respite in an overall downward trending market remains to be seen. There are several very bullish factors to consider:
Figure 2: ETHUSD, Daily Candles, Macro Support
We managed to break through the daily candles’ 50/200 EMAs. We are currently sitting on top after a successful test of support a few days ago. For now, the 50/200 EMAs are proving to be strong support.
Next, the rally off the $350 support area showed a high amount of volume indicating demand is returning to the ether markets. The rally off support broke the downward trend where we are currently consolidating in a substantial bullish pennant:
Figure 3: ETHUSD, 6-Hour Candles, Bull Pennant
A pennant of this size has a measured move of approximately $200. If we manage to breakout and rally, we should expect to see a price target of approximately $850. The breaking of the downward trend is a very bullish signal as it represents a loss of downward momentum and the potential beginning of a new, sustained, upward trend.
At the moment, ether is looking very strong. If we manage to find support on the lower trendline of the pennant, that will give us increased confidence in a continuation of the up trend. With the market currently sitting on many levels of macro support, it will take a lot of effort to push back through the established support levels.
- After finding support on the previous, macro trading range, ether managed to rally right through the downtrend where it is sitting on macro support.
- At the moment, ether is finding support on both the 50 and 200 EMAs.
- Ether is positioned in a potential bullish continuation that would have the market reaching values in the mid $800s.
Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
This article originally appeared on Bitcoin Magazine.