Ethereum (ETH) broke through an important resistance level against the dollar. ETH/BTC may also make a bullish reversal soon
Today, on the night of April 12-13, the long-awaited Shapella update (a “purse word” combining the names of two proposals to improve the network, “Shanghai” and “Capella”) will be deployed on the Ethereum network..
The most important feature of this hard fork will be that after the upgrade, investors will finally be able to withdraw staked ETH from Beacon Chain.
ETH technical analysis
According to the results of the technical analysis of the daily chart, since March 10, the ETH rate has been rapidly strengthening.
On March 17, the token hit the $1,700 barrier and turned it into strong support ten days later (green badge).
The daily RSI is also giving positive signals. The indicator made a bullish breakout of the bearish trend and exceeded the 50 mark, signaling a bullish trend.
In addition, since June 2022, the price has been inside an ascending parallel channel, although its support and resistance levels have not been sufficiently tested by the market for strength..
However, the median line of this channel played the role of resistance several times, confirming the viability of the pattern..
On April 4, the ETH price broke through the median line and significantly strengthened over the next 24 hours. If this trend continues, the price may reach the resistance line around $2400.
Wave analysis of Ethereum
Meanwhile, wave analysis suggests that all price movements within the channel were an ABC structure..
If the ratio of A:C waves is 1:1 (white), this could bring the market to a high of $2230, which is very close to the channel resistance line.
This whole bullish scenario could be neutralized if ETH closes below the $1700 area. In this case, it will not be possible to rule out a fall to the channel support at $1350.
Meanwhile, an interesting situation is also observed in the ETH/BTC pair.. Here, since September 2022, the price has been declining inside the “falling wedge” pattern..
This pattern is considered bullish, which means that the price may eventually break out of it bullishly.
Additionally, ETH is trading directly above the support represented by the 0.618 Fibo level of a ₿0.063 retracement..
This is the level that is traditionally more likely than others to cause a market reversal after a correction.
And finally, the 3-day RSI almost entered the oversold zone. Previously, these levels have already caused reversals (green circles).
Accordingly, the most likely scenario is a bullish breakout from the wedge.. In this case, ETH could rise to the next nearest resistance at ₿0.077.
However, a bearish breakout of the wedge will cancel this bullish outlook for ETH and could push the price down towards the ₿0.055 support area.
Thus, the Ethereum trend will remain bullish unless the price closes below $1,700.. Paired with Bitcoin, ETH may also soon break out of the bullish pattern and trigger a bullish reversal.
In the ETH/BTC pair, the optimistic outlook will be neutralized in the event of a bearish breakout from the wedge pattern.