- Ethereum holds in consolidation ahead of an ascending triangle breakout to $500.
- A rejection at $470 could trigger massive sell orders and a break down towards $400.
Ethereum has been bumper to bumper with Bitcoin’s majestic price action in the last few weeks. The smart contract token is up 25% in November alone despite the resistance encountered marginally above $470. At the time of writing, Ether is changing at $465 amid an aggressive push from the bullish camp to resume the ultimate rally to $500.
The formation of an ascending triangle pattern on the 4-hour chart suggests that a breakout is around the corner. Ascending triangles are formed by drawing a horizontal line connect the price swing highs and another line connecting a series of higher lows. Breakouts from the triangle can occur either to the upside or the downside. However, traders usually expect the price to break out in the same direction as the trend that preceded the triangle.
In this case, Ethereum is most likely to spike above the x-axis and continue the uptrend to $500. The bullish outlook is supported by the Relative Strength Index on the 4-hour chart. Recently the indicator bounced off the midline, pulling towards the overbought area. If buy orders surge, bullish pressure behind the smart contract token would increase and propel ETH past the triangle resistance.
ETH/USD 4-hour chart
It is worth mentioning that a bearish outlook will come into the picture if Ethereum is rejected by the x-axis. Moreover, if the volume of sell orders increases significantly, a breakdown under the hypotenuse might revisit the 50 SMA. Price action under $400 will seek refuge at the 100 SMA and the 200 SMA, respectively.
Ethereum Intraday Levels
Spot rate: $464
Relative change: 1.4
Percentage change: 0.3%