Ethereum [ETH] found itself below the resistance level at $2.8k, a barrier that has remained unbroken since August. The recent upward movement has been gradual without any sudden bursts of momentum, steadily building up momentum since September.
The negative netflows on exchanges indicated ongoing accumulation, although there was uncertainty regarding whether this would be sufficient to propel prices past the highs of the past three months.
ETH Poised for Potential $3.3k Breakout with Ascending Triangle Pattern
Ethereum has been establishing a pattern of higher lows since September. Despite its inability to surpass the $2.8k resistance level, it has formed an ascending triangle pattern. The On-Balance Volume (OBV) has been showing a gradual uptrend over the past couple of months, although still below the levels seen in June and July.
The current lukewarm demand might limit the extent of the breakout. A daily close above $2.8k is anticipated to target the $3,350 mark.
The breakout may not be immediate and might require a few days to materialize. There is also a possibility of a pullback towards $2.5k. While the Relative Strength Index (RSI) appears bullish, it hasn’t indicated a clear trend in October. This sentiment is supported by the Directional Movement Index (DMI), with the Average Directional Index (ADX) falling below 20 at the time of writing.
Volume Concerns Heightened on Shorter Timeframes
Over the past three days, both Open Interest and the price of Ethereum have shown significant upward trends. The funding rate has also increased notably in the last 24 hours, reflecting strong bullish sentiment on shorter timeframes.
However, despite a 9.4% rise in ETH since October 26th, the spot Cumulative Volume Delta (CVD) failed to show a corresponding increase. This discrepancy, along with the OBV weakness, raises doubts about the strength of the bulls.
Disclaimer: The opinions shared in this article do not constitute financial, investment, trading, or any other form of advice, and are solely reflective of the author’s perspective.