The two-week consolidation is complete and the winners in this situation are buyers. Today, Ethereum buyers have managed to break $186 and continue the price movement to the upper line of the black wedge and the price mark at $200. The breakdown happened on increased volumes and so far buyers are looking good. A new local channel of the price movement has been formed at the 4-hour timeframe. The upper trend line of which coincides with the price mark at $200:
So far, the current growth looks more sluggish than the previous fall and looks like a correction. Although, often the appearance is deceptive and it will be important to carefully follow the forces of parties in the price mark $200. Coming out of the black wedge, buyers can open up great prospects of continuing their growth to $270 with a stop at $240, but it’s too early to talk about it.
The weekly timeframe shows a clear price slowdown before $155-160, which could also mean the end of the local downtrend and continuation of the price growth from 17 December:
Another scenario is continuation of consolidation in the black wedge and updating the local low. However, this update should be insignificant, since the depth of the correction of the local falling trend is quite large. It is noticeable that the trend is gradually coming to an end.
Buyers’ marginal positions significantly have increased today, showing their confidence as it has been happen during the price growth:
Sellers, who have been trying to get out of consolidation on the chart of marginal positions for so many days, have also increased their position today. Therefore, the $200 test is very important to dot the i’s and cross the t’s.
Wave analysis shows that the current wave of growth, call it wave (d), can complete its formation near the level of Fibonacci 0.618:
In this case, we will expect another wave of fall. After that, Ethereum buyers will be able to boldly push this wedge upwards, and assure themselves of seller weakness.
Of course, a possible scenario is that wave d will be able to break through the upper trend line of the wedge. Nevertheless, first let’s wait for the test of $200 and see what Ethereum sellers are capable of. Hopefully, the market comes to life and gives us a good trend movement. See you on Friday!
Image Courtesy: TradingView