ETH technical analysis 11 Oct: Is $4k to be tested shortly?

Ether could rally to $4,000 in the short term


While bitcoin (BTC) has broken above the high made in early September, ether (ETH) is still well below it. This suggests that ether has been underperforming next to bitcoin over the past few days. However, investors believe the long-term story regarding ether remains intact.

According to the CoinShares bi-monthly survey representing more than $400bn in assets under management, 42% of the participants believe ETH has “the most compelling growth outlook”.

Messari analyst Ryan Sean Watkins tweeted on 4 October that ETH settled $1.5trn in transactions in the third quarter. This boosted the total transactions settled on Ethereum in the past 12 months to $6.2rtn – a 369% growth over 2020.

In a major step, Ethereum 2.0’s first hard fork, dubbed ‘Altair’, is scheduled to activate on the Ethereum mainnet on 27 October. According to the Ethereum blog post, this step represents a “warm-up upgrade” to prepare developers and coders ready for the ‘Merge’, which will mark Ethereum’s transition from proof-of-work to a proof-of-stake consensus mechanism.     

Could the upcoming event attract buyers, and will ETH’s price rise to $4,000? Read ether’s price trend analysis to find out.

Ether price technical analysis: weekly chart

Ethereum price weekly chart
Ethereum price technical analysis weekly chart – Credit: Currency.com

Ether’s price formed a Doji candlestick pattern last week, indicating indecision among the bulls and the bears about the next directional move. The ETH/USD pair closed at $3,415.22 with a marginal loss of 0.12% for the week.

The bulls are attempting to resolve the uncertainty to the upside. If buyers drive the price above $3,677.55, the next stop could be $4,031.68. This level may again act as a stiff resistance, but if bulls push the price above it, a retest of the all-time high at $4,381.71 is possible.

The rising moving averages and the relative strength index (RSI) in the positive territory indicate that buyers have the upper hand.

On the other hand, if the price turns down from the current level and breaks below $3,271.12, the pair could drop to the 20-week exponential moving average (EMA).  

Ether price technical analysis: daily chart

Ethereum price daily chart
Ethereum price technical analysis daily chart – Credit: Currency.com

The bears defended the $3,677.55 level aggressively but they could not pull ether’s price below the moving averages. This signals strong buying at lower levels.

The price action of the past few days has formed an inverse head and shoulders (H&S) pattern, which will complete on a breakout and close above the neckline. The moving averages have completed a bullish crossover and the RSI is in the positive zone, indicating that the path of least resistance is to the upside. 

If bulls push and sustain the price above $3,677.55, the momentum is likely to pick up. The pair could then start their journey toward the pattern target of $4,699 and eventually to the psychological level of $5,000.

Contrary to this assumption, if the price turns down from the current level or the overhead resistance and breaks below the moving averages, it will indicate that buying dries up at higher levels. The pair could drop to $2,750 if the support at $3,250 cracks.

ETH price technical analysis: trading this week

Ether will complete a bullish inverse H&S pattern on a break and close above $3,677.55. The pair could thereafter quickly rally to $4,000 where the bears may mount a stiff resistance. This bullish view will be negated in the short term if the price turns down and plummets below the moving averages.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.

Ethereum to US Dollar
Daily change
4174.26
Low: 4107.81
High: 4230.18

Further reading: Crypto market rises to new five-month high

Further reading: How to trade ethereum: the ultimate guide

Further reading: What is ether? Your simple guide to the cryptocurrency

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