Ether prediction this week: the price might be close to a bottom
Does the technical picture offer any buying opportunity?
Tom Jessop, president of Fidelity Digital Assets, has recently announced that the firm might add support for Ether in 2020 due to increasing demand from its clients. The firm caters to only institutional investors, which shows that the larger players have started to look beyond Bitcoin.
A report by DappRadar indicates that Ethereum is still the leader of dapps. According to the report, Ethereum increased the daily user base of its dapp ecosystem by 118 per cent in 2019, with daily value up 166 per cent. This shows that although competitors are challenging Ethereum they have not been able to dethrone it.
While the fundamentals remain strong, does the technical picture offer any buying opportunity? Let’s analyse the chart to find out.
Ether price prediction chart: weekly
Ether plunged below the critical support at $131.39 during the week. Though it fell to a low of $115.95, the bears could not sustain the lower levels. This shows that buyers are accumulating on dips.
However, unless the bulls manage to push the price above the overhead resistance at $157.36, the bears will make another attempt to sink the price to $100. The moving averages have completed a bearish crossover and the RSI is in the negative zone, which suggests that bears have the upper hand.
Our negative view will be invalidated if the ETH to USD pair bounces off current levels and rises above $157.36. Such a move will be the first sign that bulls are back in action. A breakout of $200 will signal a change in trend. Does the Ether price analysis of the daily chart point to a likely bottom formation? Let’s find out.
ETH to USD chart: daily
The sharp pullback from the low of $115.95 on December 18 shows that bulls are buying aggressively at lower levels. However, the relief rally is likely to face stiff resistance at the 20-day EMA. The bulls have not been able to sustain the price above 20-day EMA since November 15, hence, this is an important resistance to watch out for.
Both moving averages are sloping down and the RSI is in the negative zone, which suggests that bears have the upper hand. If the price turns down from the 20-day EMA, the ETH to USD pair can dip to $125 and below it to the recent low of $115.95. If this level cracks, the downtrend will resume. The next support on the downside is $100.
On the other hand, if the bulls can push the price above the 20-day EMA, it will signal a likely change in the short-term trend. Above the 20-day EMA, a rally to the 50-day SMA is possible.
Ether price this week: how to trade it?
The traders can initiate long positions after Ether closes (UTC time) above the 20-day EMA. The initial stop loss can be kept at $124 with the first target objective at $157. However, if the bulls fail to scale above the 20-day EMA, traders can remain on the sidelines.
FURTHER READING: What will 2020 hold for Ethereum and its cryptocurrency Ether?