Ethereum (ETH) has been downtrending since about July, and heading into 2020 it remains locked in that downtrend. But after briefly threatening to dip back into double-digit prices – getting down to $116 – the leading altcoin has seemed to stabilize above a support level. Well within the 2018 bear market bottom consolidation zone, we remain on the lookout for a 2019 bottom and see the potential for one.
Starting with the weekly USD pairing, which has just closed last night, we see price stabilized above a support zone derived from March 2018. Volume has been consistently falling during the last few months, and is now so depressed as to signal the strong possibility of sharper price action soon.
The histogram on this chart is interesting, forming a sharp inverse plateau on the negative side which is slowly contracting up. The RSI remains on a steady downtrend with lower lows and highs.
Moving to the daily USD chart, we first see that recent price action is trying to bounce off the March 2018 support, and has run into local resistance and the 21 EMA. The 21 was pierced but ultimately held the candle close; but if price can close above this EMA, the bounce might have legs and translate into a more substantial uptrend.
We see that recent RSI performance has not done well, with a marked lack of bull divergence as a result of the steep December 17 dump caused in turn by Bitcoin’s dump; this latter point may soften a bearish outlook, as all altcoins’ prices are effectively two dimensional. The recent histogram range has been quite tight, which often signals the end of a consolidation and larger moves.
Finally, on the ETH/BTC chart, we see that Ethereum has just crawled out of a really spectacular period of weakness, with the RSI staying oversold for an unusually extended period of time, which pattern was not repeated on the USD pairing. Ethereum has done horribly against Bitcoin for most of the year, capitulating out of the support line held since 2017.
But the histogram here looks healthy, and continues to contract bullish at an accelerating rate. If this keeps up, we could see the 21 EMA broken.
Due to ETH’s depressed price, it would be a juicy opportunity if it can show some strength. If the 21-day EMAs on both charts can be held for any length of time, we may have cause for bullishness.
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