As the price of Ethereum’s native digital currency, Ether (ETH), has had record-high transaction fees recently, the price of ETH has also shown an increased amount of volatility.
A new high was hit at $495 at the end of August, after which the price took the elevator down and dropped more than 30% to $308.
This dropdown caused the overall cryptocurrency market to slide as well, as the price of Bitcoin tumbled to test $10,000.
Let’s take a look at the technical chart to see where ETH price, and hence many other cryptocurrencies, may be headed next.
Crypto market daily performance. Source: Coin360
Ether holding on to $300 support level
Ether tried to continue the massive upward grind with a new breakout above $440 during the previous weeks. However, as the chart shows, the breakout failed to show strength, triggering a massive sell-off around Sept. 1.
ETH/USDT 1-day chart. Source: TradingView
The crucial support level was found at $360–$380, which couldn’t hold after multiple tests. This breakdown led to the next support level, with price sliding from $360 to $300.
When a breakdown or breakout occurs, the next resistance and support levels can be derived from historical price action.
The chart shows these pivots, with $300 being a significant one, though $280 and $245 are also important levels to watch. The previous support level at $360–$380 is now clearly defined as a resistance level, which needs to break for bullish momentum to resume.
Ether still in an uptrend on the weekly chart
ETH/USD 1-week chart. Source: TradingView
Corrections are healthy, and they often occur in a general uptrend. The more volatile an asset is, the more painful the corrections can be.
Ether rallied from $220 to $495 in a matter of weeks, and thus, a correction toward $300 shouldn’t be unexpected.
The weekly chart shows some crucial indicators for further bullish momentum. At first, the resistance zone at $450 couldn’t break in one go, and that’s normal. However, more importantly, Ether’s price is acting above the 100-week and 200-week moving averages (MAs) for the first time since June 2018.
That’s a significant bullish signal for the markets. As long as Ether stays above these MAs, dips should be considered as buying opportunities.
The crucial pivot to hold on the downside is the green zone around these MAs. To continue climbing higher, the trend needs to consist of higher highs and higher lows. Ether made a higher high at $450 and is in the process of finding a higher low.
If the green zone holds, leading to a consolidation period, the next target for Ether price may become $800 in the next impulse wave.
What’s next for ETH in its BTC pair?
ETH/BTC 1-day chart. Source: TradingView
The daily chart of Ether against Bitcoin (BTC) is showing a similar structure as the U.S. dollar chart.
Clear rejection at the next range high, through which a consolidation period is very likely and healthy to occur.
The one-year accumulation range broke upward but didn’t have a retest, at least not yet. In an uptrending market, the majority of the previous levels are tested for confirmation of support. Put another way, buyers confirm that they have an interest in the last resistance level.
This would be a very organic and healthy occurrence in the buildup of a bull market. But once levels aren’t retested and the price continues the rally, parabolic movements can begin to occur. The market is not in that phase at this point. That hasn’t happened at these levels yet, so retests should be expected.
If Ether breaks through the upper resistance zone, a continuation toward 0.055 sats becomes likely.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
This post first appeared here: https://cointelegraph.com/news/ethereum-can-reach-500-for-the-first-time-since-2018-heres-how