Ethereum has formed a wave of a medium-term upward trend. The structure of the downward trend has been disrupted, hence there is a possibility of a medium-term upward turn.
Is it a flat or a continuation of a long-term upward trend?
The upward trend has equalized the distribution of power between the bulls and the bears last Friday. A break through a zone near $14 means that there is no particular sentiment regarding Ethereum’s price, i.e. there is a sideway movement on the market. Ethereum’s price is forming a wave for a medium-term upward trend. But it’s too early to speak about a turn to growth yet. We have to analyze the traders’ reaction to the key level of $14. It’s worth noting the way the volume has been growing with the price approaching the level of $14. This only confirms the importance of that zone. That’s why the level of $14.2 will be of critical importance for the formation of an upward trend.
Most fiat currencies have formed downward trends. The minimal targets were reached by almost all currencies. As a rule of thumb, upward rebounds should follow. Wednesday news from the US can serve as a trigger for growth. The US Federal Reserve will give their commentary on monetary policy, and will also make a decision on the interest rate. All that can also influence Ethereum.
Because at the moment a medium-term trend is very clear, the future movement has two possible development scenarios. If the bulls take the advantage, Ethereum’s price will have to fortify above $12. The key level, formed by a diagonal channel, accumulated volume and the correctional Fibonacci level 38, will serve as a support line for a medium-term upward trend. Most bulls will open their deals at that level, because it’s usually very profitable to bet on rebounds. When several important instruments intersect at a single point, the odds of an event happening grow.
The second option is a formation of a new wave of the flat. In that scenario, Ethereum’s price will form a turn around $12 and will trend towards $10. The bears have already shown themselves at $14-15, which has allowed Ethereum’s price to drop.
That’s why a decisive moment for the upward trend will be the traders’ reactions at around $12. That mark is responsible for the structure of the upward trend. If the flat continues, the structure of the trend always breaks. If there is not enough support for the continuation of the trend at a key level, the opposite happens - a turn and a fall.
Ethereum has to fortify above $12, which will indicate the strength of the bulls. In that case, the medium-term growth is likely to continue to at least $20.
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