Ethereum (ETH) is struggling to break out of the symmetrical triangle it has been trading in since the beginning of the month. The price started to rally significantly around June 10 and topped out around June 16. However, it is once again ready to climb towards the top of the triangle having just tested the bottom of the triangle recently. ETH/USD has also found support on the 50 EMA on the 4H time frame. The price has also yet to break the ascending channel it has been trading in for the past few months. This gives the bulls more hope that the price could take off from here to kick off a mini altcoin season as early as this week.
The 4H chart for ETH/USD shows that the price is ready to rally from here and the RSI shows that there is ample room to do that. It is still hard to say if the price will eventually end up testing the top of the ascending channel it is trading in but we are certainly going to see a break out of the symmetrical triangle in the near future. Considering that Bitcoin (BTC) has yet to rise further before it tops out, we expect Ethereum (ETH) to follow suit and the price is therefore more likely to break above the symmetrical triangle than below it. That being said, traders should account for both eventualities and manage their risk accordingly. The symmetrical triangle on the chart can also be interpreted as an ascending triangle which would give the bulls more reason to be bullish short term.
Trading is like a war and there are different sides. One side has to lose in order for the other side to win because it is a zero sum game. This is why it is important to know the enemy because there is one. The ‘enemy’ is the whales or market makers. Now, both of them serve a very important purpose in this market because without them there would be no liquidity but when someone has this much control without adequate accountability, it leads to corruption. This is what we have seen in this market in the form of pumps and dumps.
So, while it is important to spot patterns on a chart, it is more important to understand the working behind those patterns and to ask yourself how and why you might be seeing these patterns. The 4H chart for ETH/BTC shows the price trading within a falling wedge inside a large bull flag. This is a very strong bullish setup and it suggests that we might see a breakout in Ethereum (ETH) in the near future. However, it is important to understand the limitations of each time frame. It would be unreasonable to use the 4H time frame to deduce that ETH/USD is going to keep rallying for the next few months. While this is a good setup for a bullish entry short term, it is important to realize that the price remains overbought on larger time frames and is due for a major correction long term.
Source: Crypto Daily