After two back-to-back weeks of record-setting volume, ether finds itself situated below historic resistance and currently unable to reach its downtrend line:
Figure 1: ETH-USD, Weekly Candles, Downtrend and Record-Setting Volume
For months, ether has been unable to break its downward trend. And now, after having an enormous amount of buying step in, the market finds itself consolidating sideways while it decides what to do next. Given the high amount of buying pressure that temporarily stopped the price drop, it is likely that a temporary bottom is in for ETH-USD. If we look on the daily candles, we can see just how high the daily trading volume has been for the last three weeks:
Figure 2: ETH-USD, Daily Candles, Daily Trading Volume
Looking even closer at a lower timeframe, we can see that the current consolidation is taking the form of a potential reaccumulation over the last few weeks:
Figure 3: ETH-USD, 2-Hour Candles, Potential Reaccumulation TR
After finding its local bottom around the $170s, we can see the volume has begun to consolidate in a big way over the last few weeks. To complement the consolidated volume, we can see a very well-defined supply-and-demand channel (outlined in gray). As the volume has begun to consolidate, the price has consolidated in an upward fashion, where the lows are getting higher and higher as selling pressure weakens and supply becomes more scarce.
If the market manages to break the bottom of the demand line, we can expect the next test to arrive at the $200 level. The $200 level is the horizontal support outlined above by the trading range. From there, we will have to reassess the market and take into account the volume and the strength of the move.
However, if we manage to hold support we can expect to, at minimum, see a trip to the middle of the supply-and-demand channel and possibly see a test of the previous high in the $250s. The test of the $250s is a logical spot to test because it coincides with the daily 50 EMA and has provided solid resistance for months:
Figure 4: ETH-USD, Daily Candles, 50 EMA
Summary:
- Ether saw back-to-back weeks of record-setting trading volume.
- Currently, the market is moving sideways. However, it’s doing so while making higher lows in the form of a potential reaccumulation trading range.
- Current low-end projections, if it breaks out of its ascending channel trend, would have ether testing the $200 area.
- If the current channel provides support, we can expect to see ether testing the previous high in the $250 range. This test would also coincide with a test of the daily 50 EMA — a notoriously strong resistance trend.
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.
