Ethereum incurred some explosive momentum yesterday that allowed it to erase weeks of losses that it had posted against its Bitcoin trading pair.
This latest movement has significantly bolstered its market structure, with ETH to rallying up to its local highs of $235 that were set several weeks ago. It still has quite a way to go before it reaches its yearly highs of $290.
It is important to note that although it does seem to be overtly bullish, analysts are somewhat cautious about where the cryptocurrency could trend in the near-term.
This weakness is rooted in a massive descending trendline that it has been respecting throughout the past several months.
If it continues struggling to surmount this level, analysts do believe it could be well positioned to see further downside in the days and weeks ahead.
Ethereum Posts Explosive Overnight Rally
At the time of writing, Ethereum is trading up just under 7% at its current price of $235. This marks a massive climb from its multi-day lows of $205.
This uptrend came about suddenly yesterday evening, and it doesn’t appear that there was any overt catalyst for this movement.
Interestingly, the cryptocurrency’s climb seems to have led the entire market higher with it, as Bitcoin was able to rally from $9,300 to $9,600 just minutes after ETH posted this movement.
One analyst recently offered a chart showing an interesting possibility – as this latest upswing came about after the crypto visited the lower boundary of an ascending channel.
Image Courtesy of Mohit Sorout
It is possible that this channel will help guide the crypto higher in the days and weeks ahead.
The resistance it is currently facing is rather strong, however, as this is where it was rejected at a few weeks ago alongside Bitcoin’s rise to highs of $10,500.
Ethereum is still trading down from yearly highs of $290, and it may not be able to revisit these highs until Bitcoin is able to firmly break $10,000 and leads the entire market higher.
Here’s Why ETH Could Soon Post a Notable Retrace
Ethereum’s ongoing uptrend may be short-lived, as this latest uptrend led it straight into a descending trendline that has been formed in the time following its rejection at $290.
One analyst mused this possibility in a recent tweet, offering a chart showing that this line halted the uptrend, adding that he is cutting his long positions here in anticipation of it seeing a rejection.
“ETH/BTC update: Smashed both targets; currently nearing HTF resistance; now is where I’d cut my longs,” he explained while pointing to the chart seen below.
Image Courtesy of Bagsy
If it does surmount this level, it is possible that the crypto will then target its 2020 highs of $290.
Featured image from Shutterstock.
