From its ATH, the king alt has been on a downslide over the last four months. However, the bulls finally breached this long-term bearish trend after their recent rally.
Now, a drop below the $2,994 mark could pull the alt towards the 20 EMA support near the $2,800 level. Due to the northerly direction of its short-term EMAs, ETH may continue its upward trend in the coming days. At press time, the alt king was trading at $3027.0, up 1.57% in the past 24 hours.
ETH Daily Chart
Since falling from the liquidity range at the $3,100 mark (checkpoint/POC), the altcoin has seen several bearish candlesticks on amplified volumes that propelled ETH to its low of six month on January 24. Additionally, the 50 EMA (Cyan) presented itself as a strong resistance throughout the fall.
After obliging to its historical tendencies, ETH picked itself up from the 13-month trendline support. (yellow, dashed). This reversal rally then halted at the POC. Over the past month, ETH saw an expected falling wedge (yellow) breakout on its daily chart.
During this rally, the alt has seen an ROI of over 23% over the past 17 days while forming an ascending wedge (white). Given this reversal pattern and the strength of the POC, ETH could experience a near-term setback. Following this, it would likely continue its uptrend by breaking above the crucial trendline resistance.
Rationale
As far the RSI is concerned, failure to close above the 61-resistance could find testing grounds at the 57-mark. Despite a possible near-term pullback, the momentum still favored the buyers.
Moreover, with the +DI still on the upside, the bulls have shown their reluctance to give up their advantage in the coming days. Nonetheless, the ADX showed a weak directional trend for ETH.
Conclusion
Any close below the $2,994 could propel a correction towards the 20 EMA support. Following this, it would most likely continue mounting on its underlying buying thrust to overturn the POC and 200 EMA in the days to come.
Even so, investors/traders should watch Bitcoin’s movement closely, as ETH shares a staggering 90% 30-day correlation with the king’s coin.
