Technician’s Take: ETH Outperforms, Looks to Continue Uptrend

9th March 2022
Technician’s Take: ETH Outperforms, Looks to Continue Uptrend
  • Ethereum outperforms other risk assets as price finds support.
  • Cautiously shifting stance to near-term bullish and looking for more evidence now as price action.

In yesterday’s commentary we were looking at a slight divergence between Ethereum and other risk assets, notably Nasdaq futures to which Ethereum has correlated closely. Today this divergence is even more notable with Ethereum outperforming by over 6% so far.

The cryptocurrency’s price has found a foothold at a layer of support corresponding to the January base and posted a wide range candle with price currently aggressively testing the session high. This configuration is potentially bullish. Also note that the losses from the last four sessions have been erased. The next upside target is 2,845, which is the downtrend return line plotted from the recent top on 2 February – this is the sloping line down which has contained the move since then.  If this level goes then it opens the door for the next level at 3,286 corresponding to the early February topzone. So right now, with good support below us these levels are what we are focusing on. 

A couple of other technical points. Notice that RSI in the sub window has found a base at the 40 level.  Typically we look at the 40 to 80 range in RSI as the Bullish range (i.e. where we expect to see RSI in a good bull run) and 20 to 60 as the Bearish range. So the next thing we are looking for here is a clean break of RSI 60 to confirm an uptrend in terms of momentum. 

Also notice that the recent move down has a distinct zig-zag look to it. The price action waves overlap substantially. Typically this is what we expect to see in corrections. And in this case price has been correcting the take off move that began at the end of January, which implies that if this correction is mature then the next leg of the uptrend has begun. Cautiously shifting stance to near-term bullish and looking for more evidence now as price action unfolds. 

Written by Bread News Team
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