Black Friday Rally to $170 for Ether? — Here’s What Must Happen
November 29, 2019 @ 12:58 UTC
Earlier this week Ethereum’s token Ether (ETH) took a serious tumble as Bitcoin (BTC) price swiftly broke down to $6,560 on Nov. 25. The price dropped through numerous supports, forming a bottom at $131.60, a point not seen since March 25.
As one would expect, Bitcoin’s drop to $6,560 quickly led the crypto market to become oversold and a strong relief rally took place with many altcoins. Bitcoin eventually followed with a 3-day $1,000 recovery, which brought the price as high as $7,600 on Nov. 27.
Bitcoin’s inability to stay above $7,600 and possibly muted trading from United States’ traders enjoying the Thanksgiving holiday has meant Ether spent the last 24-hours trading between $150.75 to $153.68. Normally a cool-off period would be expected following an 18.41% gain but Ether’s current positioning on the ETH/USD daily chart suggests more gains could be in store.
At the time of writing, the daily RSI is climbing toward 38 and the MACD line of the moving average convergence divergence oscillator (MACD) is rising up toward the signal line. The current uptrend on the histogram also suggests the Ether’s price action is about to shift. The MACD is designed to highlight changes in strength, direction, momentum and the duration of a trend in an asset’s price and this is typically how crypto-traders utilize the tool. While it’s not a tell-all-be-all oscillator that can be relied on as a solitary tool, it is useful for observing trend changes when combined with other oscillators like the relative strength index (RSI), Stochastic RSI and trading volume.
In the current scenario, aggressive traders will view the MACD line rising toward the signal line as an early indicator of purchasing interest returning to Ether. Risk-averse traders will wait to see if the MACD line crosses above the signal line, or above 0 and if the histogram flips from negative to positive by crossing above 0 and turning green. The MACD is a lagging indicator that trails an asset’s price action whereas the oscillators like the RSI and Stochastic RSI are leading indicators. Traders will notice that the lines of the Stoch RSI have already crossed into bullish territory. What is needed at this point is an increase in buy volume from the bulls.