Ethereum has entered a firm consolidation phase in the time following its recent bout of volatility.
This turbulence came about yesterday, with ETH’s buyers propelling it to highs of $255 before it lost its momentum and declined down to lows of $230.
Bitcoin triggered this movement, as the benchmark cryptocurrency first rallied to highs of $10,400 on Monday evening before losing all its buying pressure and reeling as lows as $8,600 on one major trading platform.
The aggregated crypto market appears to be closely watching to see what Bitcoin does next, but it is possible that ETH will be able to incur some independent momentum.
One analyst believes that this next Ethereum move could heavily favor buyers, as there are a couple emerging factors that may help boost it higher.
Ethereum Consolidates Within Bull-Favoring Technical Formation
Ethereum has entered what appears to be a consolidation phase as it struggles to garner any notable momentum.
At the time of writing, ETH is trading down just under 1% at its current price of $238. It has been ranging between $230 and $240 in the time following its immense volatility.
It is highly likely that the crypto’s near-term price action will be heavily influenced by that of Bitcoin, although analysts are pointing to a technical formation that it is currently caught within as a reason why it could rally higher.
One analyst offered a chart showing this pattern – which is clearly seen while looking towards its BTC trading pair.
The upper boundary of this broadening wedge appears to sit around 0.025. Ethereum is currently trading up 0.5% against BTC at 0.0247.
If it is able to break this level, it could see some independent momentum that allows it to outperform Bitcoin in the days ahead.
Here’s the Level ETH Needs to Break to Set Fresh All-Time Highs
Throughout the course of its latest downtrend, the cryptocurrency was able to maintain above a key support level.
This level sits at $228 – which happens to be where BTC had faced some strong resistance during its uptrend seen last week.
Another respected trader explained in a recent blog post that the close above this level is undoubtedly a bull-favoring sign.
“Looking at the daily for the dollar pair, we can see that price closed firmly above that high at $228 that I was so keenly watching, with consolidation occurring above the high,” he noted.
He also went on to explain that the cryptocurrency needs to break above $254 in order for it to see any intense upwards momentum that leads it back to its yearly highs of $290.
“There are two possible scenarios that make for high R plays; either we see a breakdown at the trendline resistance after taking out $254, which I would look to get short on, or we close above the confluence of levels and rally into $290.”
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