BTC growth has formed a bullish engulfing pattern that heralds further growth. Let’s take a look at how this event affected the Ethereum chart:
During the last week, Ethereum has been moving in a downtrend and its price has dropped to $3,100. Since then, the chart has grown by 11% and is trying to gain a foothold at about $3,400. This allowed the price to break through the downtrend line.
As a result of these movements, a falling wedge pattern was formed on the chart. As a rule, this pattern works in the direction of growth. Now we see that ETH has already broken through the upper boundary of the wedge and has consolidated above it on the 4-hour timeframe. However, there is a high probability of retesting the upper boundary of the wedge, which is in the range of $3,350 – $3,300.
Also, note that a double bottom pattern has appeared on the chart. It can be clearly seen on the 4-hour timeframe. This formation is reversal during a downtrend. Now the price is testing the “neck level”. In case of a breakdown, the Ethereum chart will grow by 10% in the flesh to a range of $3,750 – $3,850. This level has been the key one for Ethereum in the last month and a half.
Let’s take a look at the indicators. The RSI dipped below the oversold line during the September 7th fall and showed an uptrend without sharp jumps. An absolutely similar picture is observed on the MACD oscillator. This is a good move as it indicates that market participants are gaining a position.
In addition, both of these indicators have divergences from the chart. While they are showing growth, the price of Ethereum has been steadily declining. This divergence is called convergence and it speaks in favor of an increase in the price of an asset.
If you look at the daily timeframe, you will notice that Stochastic has reached the lower border. The oscillator fluctuated around one level for some time and has finally turned upward now.
All these factors speak in favor of Ethereum growth. The price stayed below $3,400 for quite a long time. It was in this zone that many market participants were gaining positions. We spoke about this and now our forecast has begun to come true. The chart is significantly unloaded. This is indicated by almost all indicators, a large volume of liquidations and a reduced trading volume.
Therefore, we believe that Ethereum will soon be testing the $3,800 resistance level again. Now there are all prerequisites for the price to gain a foothold above it. In this case, the establishment of a new ATH will be a matter of time.
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