Ethereum (ETH) Bounces from Key Trend Support: How High Can It Rally?
The $ETH price fell all the way from $4,250 to nearly $3,000 in the space of just one week. Such a sharp correction could now be over as $ETH rallies from the convergence of trendlines and horizontal support. Could this be the start of something much bigger?
$ETH bounces from 3 converging trendlines
Source: TradingView
The $ETH price is currently bouncing from the convergence of a major trendline plus two smaller ones. When you have this much convergence the impetus from the bounce is going to be that much stronger, and as can be seen in the 4-hour chart above, this is certainly the case so far.
The first target is the $3,680 horizontal resistance level. This will also mean a higher high. The following targets of $3,900 and then $4,250 would take out the next two highs, with the big psychological $4,000 level sandwiched in between. According to the Stochastic RSI indicators for the 4-hour time frame, there is plenty of gas in the tank to reach the first of these targets at the very least.
$ETH breakout could be imminent
Source: TradingView
The daily time frame chart shows that the current bounce is confirming the break-back above the major descending trendline. The resistance at $3,680 and the descending trendline are the major part of what needs to be overcome by the bulls from here.
At the bottom of the chart, a descending trendline in the RSI stretches right back into mid-July. So far the indicator line has respected this trend. However, after another bounce from the 20.00 level, the indicator line is not far from the downtrend line again. If it breaks through, this is likely to coincide with a breakout of the descending trend in the price action.
Bullish weekly time frame gives possible target of $7,000
Source: TradingView
The weekly chart does not look bad either for $ETH. Bears might point to the fact that the price is currently underneath the major ascending trendline, but will it still be there at the end of the week? Look at the size of the candle wick for the previous week.
A big pattern has emerged now of a falling wedge. When/if the price touches the top of the wedge that will be the third touch that can confirm it as a pattern. Falling wedge patterns would normally break to the upside. One could also draw in a parallel line instead, and make this a bull flag. Either way, these are bullish.
To top it all, as is the case for Bitcoin and much of crypto, the Stochastic RSI indicators have hit the bottom. Once they cross back up and head through the 20.00 level, big upside price momentum should be signalled. Around $7,000 is a final bull rally target.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
source : https://cryptodaily.co.uk