Ethereum Hits One of the Main Resistance Lines on the Daily Chart, But It Can’t Easily Break It
- the third time is not the charm
- Some metrics suggest the downtrend is over
Ethereum is finally reaching one of the first resistance lines on the chart which acts as a barrier for the asset in an uptrend and a downtrend. According to various technical indicators, apart from reaching the resistance level, Ethereum could be ready for another rally.
the third time is not the charm
Ethereum has tested the 21-day moving average three times since the beginning of May and failed to break above a number of factors including outflow of funds from the cryptocurrency market and increased investment risk.
For now, Ethereum is gearing up for another test which will be the fourth in the past two months. Such a high number of tests of a resistance may indicate that the bulls are still unable to push Ethereum higher due to lack of market inflows.
Some metrics suggest the downtrend is over
The Relative Strength Index on the daily chart is one of the indicators indicating a reversal on Ethereum. According to the divergence we saw earlier, the downtrend on ETH may be over, and what we see now is a consolidation ahead of a recovery rally.
Another indicator that speaks in favor of the upcoming retrace is the volume profile which shows a notable fading of the current trend, as the daily trading volume on Kraken exchange reaches 13,000 ETH compared to the average of 30,000 ETH.
On the lower time frame, Ethereum has already broken above several resistance lines, including the 50EMA on the four-hour time frame. A successful passage through short-term resistance is one of the first signs of an upcoming long-term reversal.
At press time, Ethereum is changing hands at $1,130.