The emergence of short-bodied candlesticks highlighted a period of indecision among buyers as ETH gained a foothold above $ 3,500. The world’s largest altcoin now awaited a catalyst to break though its consolidation phase and press onwards to $4,000.
Bullish RSI and DMI readings gave weight to a successful breakout, but ETH may soon lose its edge due to some unwanted developments. At the time of writing, ETH traded at $3,605, down by a marginal 0.7% compared to yesterday’s close.
Ethereum chart in 4 hours
Even though the bulls recovered the $ 3,500 mark, short-term resistance of $ 3,680 was preventing ETH from continuing the price advance. Now according to the 4-hour Bollinger Bands, volatility was easing in the ETH market over the past few days.
However, a bullish bias was still active as the candles remained in the upper band and the signal line. This was also evident on the 4-hour EMA Ribbons, which maintained their bullish nature since early October.
As long as ETH continues to trade under these conditions, a consolidation close to immediate resistance ($ 3,680 in this case) would increase the chances of a breakout to the upside.
On the other hand, a lot of uncertainties would begin to seep in if bears are able to initiate a close below $3,470. Since EMA ribbons would no longer offer support, ETH could drop to its 4-hour 200-SMA (green) due to short selling. This represented a near 9% sell-off from ETH’s press time level.
Now the bulls didn’t need to worry just yet as the RSI was standing above the midline. The index has maintained above 50 for 10 days now due to an active uptrend. Even the + DI of the Directional Movement Index held its neck above the -DI-, a desirable reading for bullish traders.
Conclusion
Despite moving steadily over the past few days, the abovementioned factors suggested that ETH was within a bullish bias. Therefore, the bulls had the advantage in terms of a breakout to the upside from $ 3,680. Traders must also keep a close eye on the 24-hour trading volumes, which normally start to pick up at the start of an upswing.
Having said that, a bearish result cannot be ignored just yet. A close below $3,470 could spiral into some unpleasant losses.
