It’s been a little while since we’ve really taken a strong look at Ethereum on a price basis, so we’re going to take the opportunity to do so here in this piece.
Ethereum Price Analysis
So, from first glance, we can’t witness anything remarkable occurring with the price of Ethereum via the chart above. However, there are a few patterns that are worth isolating and analyzing before proceeding to make any conclusions about future price action.
In the picture above, we can see a substantive downtrend on the 2-hour chart for Ethereum stemming from October 8th, 2018 (approximately, 2.5 weeks).
While this pattern is a short-term downtrend in relation to the larger one created by the all-time high that Ethereum reached earlier this year, making it easier to break, it is still a formidable resistance to future price action.
If you view the chart below, you can see that the price of Etheruem is on a trajectory to seriously test this short-term downtrend on the 2-hour time frame:
Thus, this price analysis is partly about assessing whether or not Ethereum can break through this resistance and exploring the implications in either scenario (it breaking the resistance or not breaking the resistance).
Assessing Price Momentum
The most common way to assess price momentum is through the RSI(14), however, in this case, we will look directly at the candles that are formulating themselves on the 2-hour chart for Ethereum to get a better idea of the price’s momentum:
For those that do not know, these candles are very indecisive and certainly not bullish at all.
The ‘small body’ of the candles you see in the chart above is indicative of very little price movement. The ‘wicks’ that occur on the north and south of these candles is indicative of the neutrality of price movement that has been occurring in the markets for Ethereum in the past few weeks.
If we scroll out, we can see that in plain view on the chart as well:
From the picture above, we can see that the price of Ethereum is near the apex of its symmetrical triangle.
As always, here are some pictures below of the symmetrical triangle (starting to notice a patter in crypto?):
So, in a nutshell, the shape of the ‘triangle’, which is drawn via support and resistance points on the chart are the crux of what determine whether something is a symmetrical triangle or not.
The breakout can either be to the north or the south or perhaps the pattern may not fulfill itself at all.
They may not sound helpful, but it’s something that will be extremely helpful in explaining substantial price action in the near future if it does occur for Ethereum.
What Happens Now?
As mentioned above, the price is currently nudging against that downtrend resistance (diagonal line going downward over top of the price). So, we want to see if we can make an educated guess about whether it will break above or bounce off it and start shooting down. Once we’ve made that assessment, we can start strategizing our next maneuvers from that point.
Relative Strength Index(14)
The RSI(14) on the 2-hour is relatively positive for Ethereum. Although the relative flatness of the line is reflective of the extreme consolidation going on at the present moment.
Above, is another look at the uptick in the RSI(14) in recent periods.
Now, let’s check it out on the daily:
On the daily, we can see that the RSI(14) is actually headed downward, overall.
That’s definitely not a positive sign for Ethereum bulls, especially when considering its recent price activity over time as well (it’s provided the greatest negative ROI of any other T10 coin since May 5th).
It’s worth noting that this information is provided to us in the midst of a severe downtrend for Ethereum.
The author believes that the chart is showing indications that the price of Ethereum will definitely decrease in the near future.
The author’s R/R idea is as follows: