2021-10-09 22:31:18

Why bulls still hold all the aces in the Ethereum market

The emergence of short-bodied candlesticks highlighted a period of indecision between buyers as ETH gained a foothold above $3,500. The world’s largest altcoin now awaited a catalyst to break though its consolidation phase and press onwards to $4,000.

Bullish readings on the RSI and DMI lent weight to a successful breakout but ETH could soon lose its advantage on the back of some unwanted developments. At the time of writing, ETH traded at $3,605, down by a marginal 0.7% compared to yesterday’s close.

Ethereum 4-hour Chart

Source: ETH/USD, TradingView

Even though bulls reclaimed the $3,500-mark, a near term resistance of $3,680 was preventing ETH from further price progression. Now according to the 4-hour Bollinger Bands, volatility was easing in the ETH market over the past few days.

However, a bullish bias was still active as candles stayed within the upper band and the signal line. This was also evident on the 4-hour EMA Ribbons, which maintained their bullish nature since early October.

As long as ETH continues to trade within these conditions, consolidation close to an immediate resistance ($3,680 in this case) would increase chances of an upwards breakout.

On the other hand, a lot of uncertainties would begin to seep in if bears are able to initiate a close below $3,470. Since the EMA Ribbons would no longer offer support, ETH could decline to its 4-hour 200-SMA (green) on the back of short-selling. This represented a near 9% sell-off from ETH’s press time level.

Now bulls did not need to worry just yet as the RSI held above the mid-line. The index has maintained above 50 for 10 days now due to an active uptrend. Even the Directional Movement Index’s +DI kept its neck above the -DI- a desirable reading for bullish traders.

Conclusion 

Despite moving steadily over the past few days, the abovementioned factors suggested that ETH was within a bullish bias. Hence, bulls had the advantage in terms of an upwards breakout from $3,680. Traders must also keep a close eye on the 24-hour trading volumes, which normally start to pick up at the start of an upswing.

Having said that, a bearish outcome cannot be disregarded just yet. A close below $3,470 could spiral into some unpleasant losses.

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