ETHXBT recently broke above a short-term triangle consolidation pattern and is currently stuck in a new one. Another upside breakout might take place, especially since ETHXBT is approaching the peak of the triangle. A candle closing above the triangle resistance at 0.02575 could be enough to signal a bullish breakout while a candle closing below support at 0.02550 could signal a bearish breakout. Upside could be seen until the triangle top at 0.02800 while downside could be limited to 0.02450.
The 100 SMA is crossing above the 200 SMA to indicate a buildup in buying pressure. This suggests that the path of least resistance is to the upside and that the moving averages could hold as dynamic inflection points.
Meanwhile, stochastic is on the move up, indicating that buyers are taking control of price action. RSI is also heading north so ETHXBT could follow suit. Profit-taking ahead of the weekend could spur a breakout as traders might be keen on taking their gains from the recent surge in bitcoin price.
The congestion in the bitcoin network is discouraging traders from putting more money in that particular cryptocurrency, exploring other virtual currencies like ethereum instead. However, bitcoin price is also stuck in consolidation against its major counterparts like CNY or USD so ETHXBT movement could simply hinge on where it breaks out.
Zooming out to longer-term time frames suggests that ETHXBT is pulling up from a recent slide and has found support at the bottom of a larger triangle consolidation pattern. With that, there’s some significant upside all the way up to the 0.03000 mark. Price appears to have invalidated a double top reversal formation on the daily or 4-hour time frame, which means that buyers are pushing to keep price afloat.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
