The crypto market suddenly woke up to life over the weekend, as major cryptocurrencies gained against the USD. Bitcoin, Ripple, Bitcoin Cash, Ethereum are just a few examples.
For the past several months, BTCUSD failed at the all-important $10,000 level. It simply lacked the energy to break higher, as each and every attempt at the level was met with selling orders. Not anymore.
Bitcoin stands comfortably above the $10,000, triggering a breakout in other cryptocurrencies. Ethereum, for instance, is one that follows the Bitcoin lead closely – and broke higher as a result.
As a decentralized system, Ethereum attracted investors from the start. Ethereum mining, faucets, staking, are just a few ways to participate in the Ethereum revolution.
Another one is to speculate on its price action. Any believer in cryptocurrencies and their role in diversifying a portfolio would be tempted to trade a break higher.
That break has come.
Ethereum Double Bottom
For over twelve months, Ethereum threatened to break the $100 to the downside. At some point, it did so, albeit for a short while.
The inability of the price to break and stay below the $100 led to subsequent bounces, directly correlated with Bitcoin attempts to break above the $10,000. However, in the meantime, Ethereum offered a return bigger than 300% to investors, while Bitcoin’s return lags.
The struggle at the $100 ended up with the price forming a double bottom. A reversal pattern, it has a measured move equal to the distance from the middle point to the $100 mark. More precisely, it resembles the W letter.
By projecting the measured move for the double bottom, the target suggests that Ethereum still has a long run ahead of it. The minimum distance for the price of Ethereum as calculated using the double bottom is $650.
A long trade at the market needs a stop-loss just below the $200. If that is the case, the $650 target provides a good-enough risk-reward ratio to make the most of this rally.
Ethereum Daily Chart