Ethereum has the potential to extend its sustained upward move to or above $ 1,500.
The second largest cryptocurrency crossed a consolidation price channel on Wednesday, breaking its upper trend line on rising volumes. So it appears that the channel is an ascending triangle that traders perceive as a bullish continuation indicator.
An ascending triangle structure occurs when an asset fluctuates between a horizontal resistance line to make swing highs and a rising trendline to make swing lows.
Therefore, if the asset trades up before this structure is formed, its potential to continue the higher trend increases after breaking through the horizontal line. Usually the breakout target lurks near the level at a distance equal to the length of the previous uptrend move, also known as the “flagpole”.
The setup for the ascending triangle
Ethereum formed a similar structure after its explosive move from $ 757 to $ 1,169. The triangle pattern set a horizontal resistance line near $ 1,127. The ETH / USD exchange rate broke the higher during Wednesday’s European session, hitting an intraday high of USD 1,170.
Ethereum is entering the resistance area with a history of sell-offs. Source: ETHUSD on TradingView.comEthereum enters resistance area with a history of sell-offs. Source: ETHUSD on TradingView.com
The price has been entered in the colored area as shown in the table above. In the past, ETH / USD has been sent lower due to higher selling sentiment. So it appears that traders with near-term prospects also benefited from the pair’s intraday spike on Wednesday. Even so, the price stayed above the horizontal line, indicating its potential to extend its breakout upwards.
Ethereum to $ 1,500
Another interruption above Ethereum’s session high of $ 1,168 could lead traders to keep an eye on the ascending channel’s breakout target. The flagpole height before the pattern is formed is approximately $ 395. This means that ETH / USD is on the way to over USD 1,500.
Bitcoin and Ethereum trading volumes are approaching their best daily peaks. Source: itBitBitcoin and Ethereum trading volumes near the best one-day peaks. Source: itBit
Further evidence of a possible Ethereum rally comes from retail demand. Nugget News founder Alex Saunders shared a one-day Bitcoin and Ethereum volume chart obtained from itBit, a digital asset platform operated by PayPal crypto service provider Paxos. He said:
“The demand in retail is absolutely rapid for BTC and ETH With on track to hit their highest daily volume of $ 110 million. The general public is catching the magical internet money bug just as a surge of institutional money rushes in. “