After a disappointing April, capped with a violent price dump upon release of the latest Bitfinex/Tether FUD, Ethereum (ETH) is showing some glimmers of hope for May after retaking, and now retesting a very critical support/resistance (S/R) zone.
With the low tested, ETH is now free to try and retake the pre-Tether level around $164. But although $156 has held, strong volume is not really coming in at the moment – perhaps eyes are still on Bitcoin (BTC), or Bitcoin Cash (BCH) which has done very well in past days.
Taking a wider view we can see why $156 and around there is so important for Ethereum. It took more than three months to crack the zone between $156-146, within an ascending triangle consolidation pattern. Getting stuck below this zone would not be good for the #2 crypto – and securing above it after a retest is very important for ETH’s medium term prospects.
Looking at the weekly chart, below, things look decent. A weekly candle close well above the critical area would be bullish – say $158 and up. A strong showing here would pave a road of confidence into next week, especially as Bitcoin seems to be showing strength as well.
Refocusing on a smaller timeframe, we will notice that the RSI is behaving nicely and putting in slightly higher lows – in spite of the weak volume. Now that $156 has held, RSI should be respected here (4 hour chart) – if it does not, it would be a major cause for concern. A violent dip visible on all exchanges was quickly bought up, not even showing up on the 4 hour RSI chart.
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