ETH has had an all time high weekly close this week. This, along with a break out from the triangle formation is setting up the price for a melt up phase. Looking at the Bollinger bands formation and the posturing of the moving averages on the weekly scale the chart looks super bullish. However there are a few warning signs staring at our faces. Let's take a look.
1. RSI is strolling down as price is moving up. There is no confirmed negative divergence at this moment, as long as ETH is not creating some kind of a lower high/lower low on the weekly. RSI can slowly move up with the price, if it continues with the melt up phase. More often than not, this creates some volatility and worry in the markets and price climbs the wall of worry.
2. ADX on the weekly is slowing down. This means the momentum is not as great as it was a month or so ago. Both ADX and DI plus are still deep in the bullish zone. This is also setting up as the melt up phase.
3. Volume is dropping off significantly. This can continue for a while as well. Or volume may come in any moment and set the mid term direction on either side. Need to keep an eye on the volume going forward.
So, for now ETH is bullish; no reason to think otherwise. It is looking more bullish than BTC at the moment. If BTC continues its sideways movement next week, we could see some moves in ETH. But the best thing would be to continue this steady melt up, which can be sustained for a longer period of time. We could see another short term pullback to test the breakout area of 1900 ish region, but unless price breaks down below the 10 Weekly EMA and gets a weekly close below 1750 area, I don't see any bearish scenarios playing out at the moment. Let's see what happens. Good luck out there!
1. RSI is strolling down as price is moving up. There is no confirmed negative divergence at this moment, as long as ETH is not creating some kind of a lower high/lower low on the weekly. RSI can slowly move up with the price, if it continues with the melt up phase. More often than not, this creates some volatility and worry in the markets and price climbs the wall of worry.
2. ADX on the weekly is slowing down. This means the momentum is not as great as it was a month or so ago. Both ADX and DI plus are still deep in the bullish zone. This is also setting up as the melt up phase.
3. Volume is dropping off significantly. This can continue for a while as well. Or volume may come in any moment and set the mid term direction on either side. Need to keep an eye on the volume going forward.
So, for now ETH is bullish; no reason to think otherwise. It is looking more bullish than BTC at the moment. If BTC continues its sideways movement next week, we could see some moves in ETH. But the best thing would be to continue this steady melt up, which can be sustained for a longer period of time. We could see another short term pullback to test the breakout area of 1900 ish region, but unless price breaks down below the 10 Weekly EMA and gets a weekly close below 1750 area, I don't see any bearish scenarios playing out at the moment. Let's see what happens. Good luck out there!
