Bullish Breakout: Is Ethereum's Price Heading Back Above $300?

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The ether-U.S. dollar (ETC/USD) exchange rate appears to be responding positively following shocks caused by regulatory actions in China.

Still, the recovery hasn’t exactly been a downhill jog. Ethereum’s native cryptocurrency, which was just finding its footing following China’s ICO ban, took a dive to $198 on Friday – the lowest level since July 31 – after major Chinese exchanges announced they would shut down ether-yuan trading under pressure from regulators.

The sell-off in the cryptocurrencies was short-lived, though, as investors realized that the exchange crackdown would not affect crypto-to-crypto trading. The second largest cryptocurrency by market capitalization soon recovered and is back around $285 today.

Looking ahead, expectations are that Chinese investors will likely continue to participate in the market via offshore exchanges. Thus, cryptocurrencies regained their poise on Monday.

Forthcoming technical improvements may also be helping to lift the cryptocurrency.

A new version of ethereum’s Geth node software was released Friday – an update that includes various protocol changes for its upcoming “Metropolis” hard fork. Ethereum is currently on target to activate the so-called Byzantium upgrade within the next month. 

Elsewhere, ethereum co-founder Vitalik Buterin, while speaking to TechCrunch on Monday, notably predicted the platform will match Visa’s transaction capacity in a “couple of years.”  

“Bitcoin is processing a bit less than three transactions per second,” he said. “Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the blockchain to replace Visa.”

With China seemingly out of the way, investors may push ether back above its 50-day moving average level of $300. As per CoinMarketCap, ether has lost 0.92 percent in the last 24 hours. At press time, the currency is trading at the $285 level. On a weekly basis, the digital currency is down 5.3 percent, due to the China dip.

Bullish falling channel breakout

Daily chart

An upside breakout (as seen on the chart above) is usually the first sign of a bearish-to-bullish trend change.

Investopedia defines “falling channel” as the price action contained between two downward sloping parallel lines.

In ether’s case, a bullish falling channel breakout can be observed, though it still needs to break above the 50-day moving average level of $300 – in which case, prices could test $345–$350 levels (resistance being offered by the trend line sloping upwards from the July 16 low and July 29 low].

On the downside, only a break below $198 would revive the bearish view and shall open doors for a sell-off to falling channel support of $170-160.

Broken fence image via Shutterstock

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.


Source: Coingraph

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