By Solomon Odunayo
Ethereum (ETH) had its community unhappy as the leading altcoin failed to overcome the shackles of its 24hr 20 Exponential Moving Average for about two months.
Bitcoin’s latest rally supported Ethereum’s declining wedge breakout to hit the 23.6% FIB level. A decisive retrace beneath the POC (Point of Control) would halt short-term endeavors by bulls.
Keeping the Point of Control might see Ethereum in a stretched squeeze before ETH presents a trend-shifting action. While publishing this article, the alt traded at $1,969, following a 4.32% gain within the past 24 hours.
Ethereum Daily Chart
Trading amidst the current bias without substantial upticks in buying volume might not be a money-making move. Considering the prevailing market conditions, rejections at 23.6% might see Ethereum exploring an extended constricted phase around the Point of Control territory.
Nevertheless, a decisive closing beneath the Point of Control might see the token losing 7%. Buyers can follow this move to trigger a rebound from $1,790. Meanwhile, the Supertrend refrained from altering its stance despite the latest breakout, hovering within the red territory since April 11.
Historically, Ethereum revealed increased buying resurgence whenever the distance between EMA 20 and EMA 50 stretches past 13%. A gradual rebound from the Point of Control area would propel the alt to hit the 38.2% zone in the coming days.
Reasoning
The Relative Strength Index presented an impressive recovery within the past four days, but it was yet to overcome the midline and regain a bullish stance. Moreover, the Chaikin Money Flow’s upsurge witnessed a slowdown around the zero-line.
The on-balance volume saw lower peaks and troughs within the past couple of weeks. That affirmed the current direction’s momentum. Lastly, these indicators saw bearish divergences with price last week, hinting at potential setbacks in the short term.
Final Thought
Bulls should resurge to trigger buying volumes around the Point of Control territory to avoid a 7% decline. Closing below $1,956 would translate to short-term setbacks. Meanwhile, an eventual revival past the EMA 20 should act as a bulls’ entry trigger.
Such a case would present a profit-booking zone at $2,180. Lastly, watching Bitcoin’s actions would help make profitable decisions as Ether shares a staggering 96% monthly correlation with BTC.