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Ethereum (ETH) in between support/resistance zones at $183 and $175

Many high cap cryptoassets have lately seen dramatic increases in valuation, in the wake of Bitcoin’s (BTC) shocking breakout from $4,200 a week ago (which it continues to defendΒ as of today, 9 April). Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum Classic (ETC) have all had their own breakout events.

ethereum long 7x shorts(source: CryptoCompare)

Meanwhile,Β Ethereum (ETH), has definitely seen some impressive uptrending gains since the overall February uptrend began, and again after the April 2 breakout.

ethereum long 7x shorts(source: CryptoCompare)

But, the sentiment in the air – and on the charts – seems to be that Ethereum deserves its own shocking price rise, more like a doubling than a steady grind up.

The Bitfinex exchange presents us with some evidence for this sentiment, as ETH long contracts on the exchange have climbed to about 560,000 contracts at time of writing – which is seven times higher than the number of short contracts held on the site.

But in fact, the end of bearish sentiment for ETH seems to have really got going in early February at the start of a steady uptrend in the markets.

(Ethereum shorts on Bitfinex; source: TradingView.com)

Not quite obversely, bullish sentiment for ETH, at least on Bitfinex, has been rising for some time. The same early February period is circled below in blue.

(Ethereum longs on Bitfinex; source: TradingView.com)

It would be unreasonable to say that this sentiment is unfounded. Ethereum, after a 25% breakout between 2-3 April, has been stair-stepping its way higher throughout the past week, and holding on to most of its gains with each step.

(source: TradingView.com)

The current price action seems snagged between support/resistance zones at $183 and $175.

(source: TradingView.com)

A look at the weekly chart helps us understand the high expectations of a break up. The region between $160-165 was extremely important, having multiple contact points (blue circles) come from both above and below. But it has now been solidly broken. A strong – or perhaps stronger – run up into the 200’s could have been expected. Perhaps a retest down toward $165 will help build the confidence for a stronger run.

(source: TradingView.com)

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Written by Ravi Gupat

Ravi grew up in India and graduated in Economics. He is a serial entrepreneur who has founded and exited several companies in tech and media over the past 15 years. He is also an early stage investor and advisor in various blockchain-based companies.

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