With Bitcoin slamming a new ATH above $ 67,000, market watchers were now waiting for the world’s largest altcoin-Ethereum, to force a similar outcome. Currently challenging the upper trendline of its horizontal channel, Ethereum awaited a 60% run up from the breakout point, bringing its price close to $7K.
However, a failed escape attempt could result in heavy losses for ETH. Bearish divergences along the RSI and MACD presented dangers ahead if bulls are unable to clear the $4,400-mark with conviction. At the time of this writing, ETH was trading at $ 4,083, down 2.5% in the past 24 hours.
Ethereum Daily Chart
Ethereum’s three distinctive highs around $ 4,300 as well as three lows around $ 1,700 indicated a horizontal channel on the charts. Since early May, ETH has respected the boundaries of this pattern, witnessing a reversal after touching its extreme ends.
ince August 4, the bulls have kept ETH above the center line of the channel. An inverse head and shoulder took shape above $2,700 ETH prepared for an upwards breakout and a possible 58% hike based on the highest and lowest points of the pattern.
However, a closer look at some of its metrics presented a rather baffling picture. For instance, the RSI formed four lower peaks from early-May to late-October and highlighted a bit of a bearish divergence with respect to ETH’s price action.
These lower peaks were also evident on the MACD. Based on these readings, ETH would struggle to challenge $ 4,400 and fall back to the midline at $ 2,700 if the RSI and MACD fail to break their upper trend lines.
However, bulls can take heart from the Awesome Oscillator’s trajectory which indicated no such threats. A move above $ 4,400 was very possible and could even happen as soon as the broad market activates risk.
Conclusion
ETH looked set to breakout north of its horizontal channel and target $6,500 over the next few months. However, if the RSI and MACD remain limited below their upper trendlines, ETH would look at a barrel of a 35% sell off towards the $ 2,700 mark.
