Ethereum is primed for a bullish breakout, aiming for $2,220. Traders monitor resistance levels, an inverse head and shoulders pattern, the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD). Exercise caution for potential pullbacks and watch key support levels.
Ethereum, one of the leading cryptocurrencies, is showing promising signs of a bullish trend with the potential for a significant price surge. Traders and investors are eagerly watching as Ethereum aims to break through the $2,000 mark and potentially reach $2,220 in the short term. However, before this upward movement can occur, Ethereum must overcome resistance at the $1,950 level.
This breakthrough would signal a confirmation that Ethereum is ready to continue its upward momentum and bridge the gap towards $3,000. The current focus is on an inverse head and shoulders (H&S) pattern that formed at the end of June. This pattern, characterized by three distinct troughs, indicates a potential reversal from a downtrend.
Smart traders who identify this pattern are carefully putting buy orders above the pattern’s “neckline,” which is currently at $1,920 for Ethereum. Such a breakout usually indicates the end of negative market sentiment and the start of a positive phase. To minimize risk, traders are recommended to set stop-loss orders slightly below the neckline or consider taking profits once the breakout happens, taking into account the pattern’s projected height.
Amidst Ethereum’s modest advantage over its immediate support, upheld by the 50-day Exponential Moving Average (EMA), traders who seek to initiate new long positions might choose to hold off until Ethereum solidifies support beyond the resistance of the inverse head and shoulders (H&S) neckline. This validation would imbue a sense of assurance in the expected price surge.
Investor Sentiment Shifts: Money Flow Index Signals Bullish Momentum For Ethereum
The Money Flow Index (MFI), a technical indicator measuring buying and selling pressure, suggests that investors are gradually leaning towards a bullish outcome. Following a retracement earlier in the week, momentum is building behind Ethereum as the MFI recovers towards the overbought region. This upward movement could facilitate a breakthrough past the psychological level of $2,000.
Another positive signal may come from the Moving Average Convergence Divergence (MACD) indicator, which could flash a buy signal during Thursday and Friday’s trading sessions. If the MACD line (blue) crosses above the signal line (red), it would serve as a call to investors to buy Ethereum. Additionally, the momentum indicator’s position above the mean line indicates that the correction phase is likely over, and bullish sentiment is resurfacing.
Traders should be prepared for potential pullbacks and closely observe Ethereum’s reaction to the neckline resistance at $1,920 and the subsequent hurdle at $1,950. Sustaining a position above either of these levels would indicate that bulls are still in control, allowing traders to hold onto their long positions.
The Moving Average Convergence Divergence (MACD) indicator may flash another buy signal during the sessions on Thursday and Friday. This call to investors to buy ETH would come into the picture, with the MACD line in blue crossing above the signal line in red.
However, if selling pressure becomes too strong and the support at the 50-day EMA gives way, the MACD could enter the negative region, further extending the bearish trend into the weekend. In such a scenario, Ethereum may find support at the 100-day EMA at $1,884 and the 200-day EMA at $1,858.
As Ethereum’s price movements attract attention from traders and investors, all eyes are on the potential breakout above $2,000 and the subsequent rally towards $2,220. Traders are advised to closely monitor the key resistance levels and technical indicators to make informed decisions regarding their positions in this volatile market.