Ethereum bulls are still pushing for $300 but the possible formation of an M-Top threatens to thwart the current uptrend.
The recent Bitcoin (BTC) price correction inflicted double-digit losses on many altcoins and while Ether (ETH) also took a knock, it recovered quickly compared to the price action of other top-ten altcoins. Since dropping 17.67% to $237.62 on Feb. 16, Ether has rallied 20.78% to $285.99, less than $5 away from its 2020 high at $289.26.
Currently, two of the three price targets discussed in previous analysis have been hit and now that the altcoin prepares to overtake it’s 2020 high, traders have likely set their sights on targets above $300.
Crypto market daily price chart. Source: Coin360
To date, Ether is up more than 120% since the start of 2020 and the current market sentiment suggests the digital asset could continue to rise. Similar to Bitcoin, the recent convergence of the 50-day and 200-day moving average formed a golden cross and with the exception of last weekend’s sharp correction, trading volume has been noticeably increasing in the past 9 weeks.
ETH USD daily chart. Source: TradingView
As traders push the price towards $300, $305 could provide slight resistance but above this, a move to $312, $323, and $337 are the next targets for investors. Above $337, the 2019 high at $367 comes into sight and after this $408, a lofty price not seen since August 7, 2018.
In the event that Ether loses its current momentum or experiences a sharp rejection at $305, there is support at $272. Below this, there is also support at $225 near the 38.2% Fibonacci Retracement level. The daily and 6-hour timeframe shows $285 working as resistance and the price has been unable to sustain above this level on the previous 9 attempts since Feb. 14.
Some traders will also notice what could possibly be the formation of an M-top. If this were the case, then Ether would need to descend to $237.15 to break the neckline and confirm the pattern.
ETH USD 6-hour chart. Source: TradingView
If the M-top narrative were to play out, traders would look for a bounce at the 38.2% Fibonacci Retracement level ($225) which would retest the neckline at $237.15.
If bulls failed to buy into the dip with strong volume, one would expect this level of support to collapse, leading Ether price lower to the 61.8% Fibonacci retracement at $187.82. Currently, this scenario seems unlikely but it’s good to consider all outcomes when trading cryptocurrencies.
For the time being, the support at $272 and purchasing volume on the shorter time frames should be observed. Traders should and also watch to see if the asset continues to make lower highs and lower lows on the 4-hour chart.
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