How Much Room Does Ethereum (ETH) Have To Rally Further?

Ethereum (ETH) remains in a steady downtrend. The 4H chart for ETH/USD shows the price trading within a descending channel since the beginning of July. However, we have seen short lived bullish rallies along the way because nothing just keeps on rising or falling in a straight line. The price is now at a point where similar bullishness can be expected. However, what most traders want to know is how much room the price has to rally further. If we zoom in on the recent price action, we can see that it has been a reflection of what has been happening BTC/USD but Ethereum (ETH) has lagged behind as far as the gains are concerned. However, we have seen after every decline in this downtrend that the price ends up rallying to test the 200 moving average. 

The chart also shows that bullish reversals during this downtrend have been taking longer at the beginning of the downtrend but as the price keeps on falling further down the descending channel, it takes less time to see a bullish reversal. However, the bullish move is also smaller in comparison which means that this time we might end up seeing a move towards the 200 moving average just above $170. The price could soon decline down to $170 which is close to the 50% fib extension level. We might even see ETH/USD break the descending channel that we see on the 4H chart to mislead traders before the next big downtrend. It is very important to realize that trend lines are not very reliable in technical analysis. They certainly do not have the same level of credibility as horizontal lines, not even close.

The daily chart for ETH/BTC shows that there is still some room for Ethereum (ETH) to decline against Bitcoin (BTC). However, we might soon see the pair break out of this triangle to make its next decisive move. It is very probable that we might see a retest of the 200-day moving average before the next decline. This is why the altcoin market as a whole might yet rally against Bitcoin (BTC) before the…

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