Like Bitcoin, Ethereum has flatlined over the past few months. For just around eight weeks now, the leading altcoin has traded in between $230 and $240, barely deviating from these two levels.
Yet an analyst expects a massive breakout should ETH break above an extremely close resistance level.
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Here’s How Ethereum Bears Could Soon Get “Scorched”
According to a cryptocurrency trader, Ethereum breaking above the red line seen in the chart below will cement the end of the bear trend that has constrained the asset since mid-2019:
“Lmao imagine if that red line finally breaks. Bears would get their asses scorched.”
The red line was formed at the highs of 2019’s bull market. Since its formation, it has constrained rallies in the price of ETH, almost exactly marking the highs in February and the highs in June and earlier this month.
Macro ETH price analysis by trader "Byzantine General" (@Byzgeneral on Twitter). Chart from TradingView.com
There are indicators suggesting ETH may soon break past that pivotal level, according to a variety of analysts.
Per previous reports from NewsBTC, one trader said that Ethereum is likely to continue to move higher as it consolidates above key support levels:
“ETH LTF Update: For the past 7 days it seems bears have failed to break back below $238 with any conviction, thinking we are currently in mini accumulation before another leg up… If bulls can take out $246 then momentum should take us a lot higher, expecting a breakout soon.”
Image Courtesy of Cactus. Chart via TradingView
The Tom Demark Sequential, a time-based indicator that prints signals at inflection points in an asset’s trend, has also just flipped bullish. The indicator just printed a “9” candle just last week, suggesting a move to the upside will follow.
Fundamentals Corroborate Upside
On-chain indicators also corroborate the expectations that Ethereum will soon swing to the upside. One analyst, in fact, identified four factors suggesting ETH will “take another leg higher.”
They are as follows: The market cap of ETH-based tokens has passed the value of all ETH, the number of ETH locked in DeFi has rocketed to 3.4 million coins, Ethereum is seeing increased network usage, futures for the cryptocurrency are still at manageable levels.
One risk for ETH, though, is selling pressure outweighing buying pressure caused by ICOs and miners. Brave New Coin analyst Josh Olszewicz suggested last week that there’s a likelihood the inflation of the asset is still outweighing demand:
“As impressive as DeFi ETH locked has become, it only recently surpassed ICO treasury selling and is no where near absorbing inflation since 2018… b/c im looking at the $ETH price chart with the $ETH the on-chain data and there’s a massive divergence here.”
With ETH trading in a macro bear market since the 2018 highs, this seems to be the case.
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Featured Image from Shutterstock Price tags: ethusd, ethbtc Charts from TradingView.com Ethereum Bears Will Get "Scorched" If This Pivotal Resistance Breaks