Ethereum’s price is at the bottom limit of the medium-term flat. The odds are stacking in favor of an upward movement.
Is the long-term correction over?
The movement, which has broken through the key support level around $14 is a wave of correction towards the downward trend. That was confirmed by the turn at $12. Ethereum’s price has broken through that resistance and, after fortifying at the $12 mark, formed a turn to decline. As was pointed out earlier, that level was responsible for the balance of power between the bulls and the bears. A fortification meant that the bears are holding the advantage, which has consequently led to the price reaching the minimal target and dropping sharply. Ethereum’s price has reached the minimal target of the long-term correction. That could provoke a continuation of the long-term trend.
The downward movement which has started at $14 is a wave of the flat. Because there was no fortification below $14, the forces of bears and bulls are now balanced. Since this is a wave of the flat, a reverse movement is likely to follow. The upward movement will be defining for the medium-term scale, because if the price fortifies below the key level of $12, an exit from the medium-term flat could follow. The importance of the $12 mark is confirmed by the accumulated volume in that area, as well as the crossing of Fibonacci grid 61 and the diagonal channel. An exit from the medium-term flat will mean a continuation of the long-term trend, more specifically, formation of a deeper downward correction. If such a fortification doesn’t form, there will be a new upward flat wave, which will stop around $14; that stop is likely to be a short one, considering the pressure of the long-term dynamics.
In regards to fiat currencies, most of the world currencies have formed upward trends, as was said earlier. Such movement corresponds to the upward correction (fortification) of Ethereum’s price, which was happening before July 29, while the fiat currencies were forming upward trends. After that, the currencies have reached the upper limits of their respective flats, which could exert pressure on the downward Ethereum trend. However, both Ethereum, and the fiat currencies, are not displaying clear signs of the formation of the downward trend at the moment. That’s why the downward movement is limited on the medium-term scale.
This week will be filled with important news, which could change the state of affairs on the fiat markets.
Ethereum network underwent a hard fork on July 20. That event was caused by an update of the protocol, without keeping backward compatibility with previous software. Such a decision was in alignment with the opinions of the majority of Ethereum community members. The coins which were stolen by a hacker a month ago, will be returned to the investors. Most users have decided to move to the new Blockchain, thus keeping control of more than 95% of hashpower. However, a small number of the users have stayed loyal to the original Blockchain, which does not use the fork’s code which “cancels” the creation of The DAO. That community was presented with an alternative in the form of Ethereum Classic, which preserves the authenticity and resistance to censorship of the original Ethereum. There are also rumors out there, that ETC is some kind of a joke.
At the moment, ETC’s price is forming an upward trend.
An important technical level is the price of $1.85. That is a crossing area for the correctional Fibonacci level 50, diagonal channel and accumulated volume. The movement toward 1.85 can be considered a correction towards the upward trend. In case of a breakthrough at that level, the structure of the upward trend will be disrupted. In that case, there will be either a flat or a formation of a downward turn. That’s why the force of the upward movement is dependent on whether the price of ETC fortifies above $1.85.
Key support lines for the trends:
In case of a breakthrough the level of $12 on Ethereum, the structure of the downward trend will be disrupted, which could provoke an upward turn. The long-term upward trend can continue from that point.
A key support line for ETCUSD is near $1.85. In case of a breakthrough at that level, the trend will most likely change, or a flat will start forming.