Ethereum Coin Is on the Verge of an Epic Breakout
The insatiable appetite for cryptocurrencies is actually quite astonishing, and the mere fact that Bitcoin continues to defy the laws of gravity is a testament to this.
I am focusing on ETH now because I have reason to believe that the current appetite for cryptocurrencies is going to increase, and it will trigger a frenzy of buying that will take Ethereum coin to mind-blowing heights.
These beliefs are centered around the price action on the Ethereum coin price chart and the technical price pattern that is currently in development.
Examining a price chart is known as technical analysis, and it is based on the notion that an asset’s price carries momentum and that, therefore, it trends over time. As a result, historical price and volume data can be used to forecast what the future may bring.
I have been using this method for nearly two decades, and one of my favorite patterns is currently in development on the Ethereum price chart. This pattern ranks among my favorites because it also happens to be one of the most powerful ones.
The Technical Price Pattern
The following Ethereum price chart illustrates the technical price pattern that is currently in development.
Chart courtesy of TradingView.com
This price chart illustrates that a triangle pattern is currently in development. These patterns arise due to the price action that is characterized by a sequence of lower highs and higher lows.
The trend lines are created by connecting this sequence of highs and lows, and they serve to define the converging levels of price support and price resistance, which define this pattern.
The converging levels between price support and price resistance are the reason why triangles are particularly powerful patterns. As the pattern develops, the confinement of space between support and resistance causes energy to be stored within the pattern.
Support currently resides at $295.00, while resistance resides at $380.00, and this stored energy will finally be released when the price musters enough strength to either break above resistance or fall below support.
The size and scope of the pattern is directly related to the reaction that can be expected to follow. Recently, there have been six changes of direction within the triangle. A breakout is imminent because these patterns usually resolve themselves once the triangle is 70% complete, and this criterion has just been fulfilled.
I am expecting a very large reaction to occur once this pattern is resolved, and it is based on the constructive price action that is highlighted on the following Ethereum price chart.
Chart courtesy of TradingView.com
This Ethereum coin price chart has been annotated in order to highlight the constructive price action that has defined the bullish advance in this cryptocurrency.
Constructive price action consists of a series of impulse waves and consolidation waves that are responsible for creating and sustaining a trend.
The wave highlighted in green is the impulse wave, and it captures the period in a bullish trend when an asset’s price stages a sustained move toward higher prices.
The wave highlighted in purple is the consolidation wave, and it captures the period in a bullish trend when the asset price refrains from staging an advance and instead creates the necessary conditions for a new advancing impulse wave to develop.
The consolidation wave that is highlighted in purple is the same triangle pattern that was highlighted on the previous chart. Once the Ethereum coin price closes above resistance, which currently resides at $380.00, it will indicate that the wave pattern is complete, implying that a new advancing impulse wave is set to follow.
Ethereum Coin Price Forecast
The great thing about constructive price action is, not only does it suggest the direction that a price is heading in, it can be used to forecast a potential price target.
There are two ways to generate this potential price target, and I am choosing the method called a parabolic extension because it is more consistent with assets that are exhibiting bubble-esque trading characteristics—which is what I currently believe the cryptocurrency market is exhibiting.
This method involves taking the log-based length of the initial impulse wave and extrapolating that value from the base of the consolidation wave. I have included this projected wave onto the Ethereum coin price chart, and it is suggesting that a move toward $9,000.00 is a possibility. I have chosen to use a $6,000.00+ target as an objective because I feel that it is both conservative and ludicrous at the same time.
Let me reiterate that the $6,000.00+ target is contingent on a successful break above resistance, which currently resides at $380.00.
I am watching the development of a technical price pattern currently on the Ethereum coin price chart because I believe it will determine when this cryptocurrency is set to make its next move. I have the inclination to believe that this pattern will resolve itself in a bullish manner and that much higher prices will follow. I can foresee $6,000.00+ as a possible price objective, and it is based on a method known as a parabolic extension.