Ethereum (ETH) Technical Analysis: Suddenly Surges out of Bearish Pattern, Will it Last?

Ethereum was looking almost certain to break bearish out of a descending triangle pattern earlier this morning, as the asset showed signs of weakening at the consolidation point between the $203 support and a strong downtrending resistance level. Hopes of a late bullish run up to the Devcon iv meetup before the weekend were diminishing and all indicators were suggesting that Ethereum was about to take another dip.

In the last few hours, however, a sudden surge of bullish momentum appeared out of nowhere and carried ETH’s price up $7/ 3.50% in a matter of seconds; allowing it to break free of the bearish pattern that had been holding it down for the last 11 days. This freak wave of support has already started to correct from its peak, but questions still remain unanswered regarding who or what caused this pump and will they strike again today?

The Story Up Until Now

On the 4hr ETH/USD chart, we can see that the asset experienced a heavy sell-off on October 11th, at the same time ETH/USD short trading activity spiked. After the strong bearish decline, ETH became stuck under a key level at $203 for four days, until the short seller(s) bought back into ETH and sent it rocketing back up 23%. After meeting a strong downtrending resistance level, Ethereum eventually returned to the $203 which met it as new support.

It was at this time that we had an almost complete bearish descending triangle pattern and it was to be only a matter of moment before ETH broke under its pressure. Almost every indicator was favouring a bearish continuation, with the RSI and MACD indicator in particular highlighting the bulls exhaustion.

The Story Now

Catching up with the price action right now, we can see that the $206 level is doing well at supporting the current momentum and is allowing the bulls to rest before potentially attempting another run. ETH bears do not seem to be opposing the current uptrend either, as selling pressure remains low. Volatility has also started to show signs of dropping as ETH traders appear uncertain about the short-term direction of this asset.

-On the 1hr RSI indicator, the spiking momentum has now plateaued as momentum from both buyers and sellers slackens off.

-The Tenkan-Sen line on the Ichimoku indicator has passed bullishly over the Kijun-Sen line but both are now also travelling sideways as volatility decreases.

The asset will need to break over $207 before candles pass cleanly through the kumo and signal a reversal over a 1hr time period.

At this moment in time it is difficult to predict which way Ethereum will go as the freak surge in momentum that elevated ETH out of the bear pattern has suddenly stopped, and neither the bulls nor the bears seem sure of what to do. 

Ethereum Price Targets

Bullish Targets: $210.70, $214.40 and $216.71

Bearish Targets: $200.60, $197.89 and $191