Ethereum Reaches Blue Skies While Bitcoin Attempts A Break Out: What's Next For The Cryptos?

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Ethereum Reaches Blue Skies While Bitcoin Attempts A Break Out: What's Next For The Cryptos?

Posted by Melanie Schaffer on Thursday, November 4, 2021 Under: Technical Analysis

© Provided by BenzingaEthereum (CRYPTO: ETH) made a new all-time high of $4,461.96 on Friday at 12:06 p.m. ET after continuing to trade higher in a fairly consistent uptrend Benzinga called out on Oct. 24.

Ethereum was leading the crypto moon race while Bitcoin (CRYPTO: BTC) attempted to break up bullishly from a descending channel, but was still trading about 7% below its Oct. 20 all-time high of $66,999.

If Ethereum is able to get bullish follow through on the break it could be a big weekend for the crypto market, especially if Bitcoin is able to follow suit. Consolidation will eventually be needed, however.

The Ethereum Chart: On Oct. 1, Ethereum broke up bullishly from a pennant pattern on the daily chart and began trading in an ascending channel between two parallel lines. The upper trendline of the pattern has acted as resistance for the crypto on multiple occasions, while the lower trendline has been acting as support.

On Friday, Ethereum soared up to within 0.56% of the upper trendline of the channel but rejected and wicked from the area. The upper wick may cause Ethereum to print an inverted hammer candlestick, which could indicate the stock may need to trade lower within the channel before attempted to break up from it again.

Ethereum has higher than average volume on Friday, which indicates there is a high level of trader and investor interest in the crypto. By late afternoon, Ethereum’s daily volume was at about 223,723 compared to the average 10-day volume of 200,606.

The crypto’s relative strength index (RSI) was indicating consolidation was needed because it was measuring in at about 64%. When a stock or crypto’s RSI nears or exceeds the 70% level it becomes overbought, which can be a sell signal for technical traders.

Ethereum is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. Ethereum is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.

Bulls want to see Ethereum close the 24-hour session above previous May 12 all-time high of $4,384.43 and then for bullish momentum to give the crypto follow through for a blue sky run. Ethereum’s only resistance in the form of price history is at its new all-time high although the crypto may find psychological resistance at $4,500. Bears want to see big bearish volume drop Ethereum back down to the bottom ascending trendline of the channel and then for bearish follow through to force a break below the trendline. Ethereum has support below at $4,168 and $3.949. eth_oct._29.png