Yesterday, we covered how Ethereum (ETH) was (predictably) rejected at the 2019 ‘Capitulation line’, and was sent back down to gather strength for – presumably – another attempt at this important level. Today, it almost seems like this leading altcoin is ready to try again, after having spent hardly any time cooling off.
Starting on the ETH/Bitcoin daily, we see the rejection from a few days ago after going completely overbought on the RSI. The histogram has been trending down since then, mostly flat with some very slight acceleration coming in today, but overall looking pretty modest.
There is a clear space for a safe retracement and MTF downtrend, if Ethereum needs one. This would occur above the breakout level, if the HTF uptrend that seems to have form is to be maintained. In an obvious reading, it doesn’t seem possible for ETH to keep going without some larger correction, given how overbought it has become.
However, this doesn’t mean ETH will actually do that, and obvious readings are often the wrong ones in the market. If we slide over to the 4-hour chart, we see that the scope of retracement has been very modest, given the extremely overbought RSI on this timeframe (reaching 91%, a figure rarely ever seen).
Both RSI and histogram seem to be reversing here, as ETH forms what looks like a bull flag on top of the 21 EMA. It appears to be steaming again for the capitulation line; if this is broken with such conviction, it will change Ethereum’s already-optimistic market paradigm. What is nice about this situation is, both paths are ultimately bullish for Ethereum (and for the altcoin markets in general).
Finally, on the daily ETH/Dollar chart, we see that Ethereum has taken the resistance zone around $220 and flipped it to support. With the EMAs far outpaced, now, by price, perhaps the most healthy scenario here would be for ETH to simply go flat here and let the averages catch up.
We see that the indicators are extremely strong, with both of them putting in confluent higher highs with higher price. But as it stands, they look too high, too fast, and some correction here would be welcome.
Ethereum looks excellent, but the overbought conditions are begging for a correction. Still, the price is hardly flinching at all – it is a strange sight indeed, and no one can predict where it will go from here. Realistically, though, we should be expecting some downside, if for no other reason than it is the cautious move.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
Featured Image Credit: Photo via Pixabay.com
