Ethereum (CRYPTO: ETH) broke up bullishly from a daily inside bar at 10 a.m. EST on Tuesday and by midafternoon was attempting to hold above Monday’s high-of-day price.
The former Goldman Sachs executive and Real Vision founder and CEO Raoul Pal in an interview with Hedgeye CEO Keith McCullough said the “flippening,” when Ethereum’s market cap will surpass that of Bitcoin’s (CRYPTO: BTC), could happen during this market cycle. Pal also stated he doesn’t believe Ethereum is a better asset to Bitcoin, however, and expects Bitcoin’s price to reach $1 million in the future.
Ethereum’s market cap currently sits at about $509 billion compared to Bitcoin’s $1.08 trillion market cap. Ethereum would need to soar to approximately the $9,000 level, while Bitcoin’s price stayed the same, for that to happen as of now.
Ethereum was certainly looking more bullish on Tuesday, trading up over 5% higher in comparison to Bitcoin, which was bouncing up less than 2%.
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The Ethereum Chart: On Nov. 16, Ethereum broke bearishly from a rising channel Benzinga pointed out on Nov. 11 on big bearish volume. The high volume that entered into the crypto on the break from the pattern confirmed the pattern was recognized, which was a warning signal for Ethereum bulls.
Ethereum has since traded in a sideways consolidation pattern between $3,960 and $4,438 for the last 7 days. In its consolidation, Ethereum has created an uptrend pattern on the daily chart with a high printed on Nov. 20 at $4.322.86 and a higher low on Nov. 22 at the $4.024.45 mark. For the uptrend to continue Ethereum will have to rise above the Nov. 20 high-of-day in the near future.
The retracement and subsequent consolidation have helped to cool down Ethereum’s relative strength index (RSI), which was running hot in the 60% to 70% range between Oct. 14 and Nov. 11. When a stock or crypto’s RSI nears or reaches the 70% level it becomes overbought, which can be a sell signal for technical traders. Ethereum’s RSI now sits at a much more comfortable 49%.
Ethereum is trading above the above the eight-day exponential moving average (EMA) but slightly below the 21-day EMA, with the eight-day trending below the 21-day, which indicates indecision. If Ethereum can regain the 21-day EMA as support and remain above it the eight-day will cross back above the 21-day, which would be a bullish sign for going forward.
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- Bulls want to see sustained big bullish volume push Ethereum back up above the 21-day EMA and a resistance level at $4,384.43, which may give the crypto the boost needed to print a higher high. Above the level Ethereum has resistance at $4,384 and the all-time high of $4,867.81.
- Bears want to see big bearish volume come in and drop Ethereum back down below the eight-day EMA, which could cause the crypto to retest support at $4,168.56. Below the area there is further support at $3,949.45.