ETH technical analysis 18 Oct: Is a new all-time high likely?

Ether could retest the all-time high in the short term

Graphic showing Ethereum code/cryptocurrency mining                                 
With bitcoin futures potentially being approved for trading as an ETF in future, will an ETH ETF also be on the cards? – Photo: Shutterstock
                                

Speculation is rife on social media that after the approval of a bitcoin (BTC) exchange-traded fund (ETF), regulators may greenlight an ether (ETH) ETF in the future, too. 

Technical analysts at Fundstrat Global Advisers said that ether’s market share has increased in the past few days, which is a positive sign. The analysts also projected in a note published on 14 October that ether will break out to a new all-time high and reach $4,900.

Even billionaire investors Barry Sternlicht, chairman and CEO of Starwood Capital Group, and Mark Cuban, owner of US basketball team the Dallas Mavericks, have come out in support of ether.

“Bitcoin is a dumb coin, it has no real purpose other than as a store of value, and it’s crazily volatile. So, ether, I own some of that. It’s a programmable bitcoin, and there are tonnes of other coins that are built on that system,” Sternlicht said during an interview with CNBC, according to Cointelegraph.

While speaking to CNBC, Cuban said bitcoin is “better gold than gold”. However, he added, “As an investment, I think ethereum has the most upside.”

Could a new all-time high for bitcoin also boost sentiment for ether, pulling it to a new all-time high too? Read ether’s price trend analysis to find out.

Ether price technical analysis: weekly chart

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

The uncertainty of the Doji candlestick pattern resolved to the upside with a break above $3,672.47 last week. Ether’s price rallied 12.68% to finish the week at $3,848.13.

Both moving averages are sloping up and the relative strength index (RSI) is in the positive territory, indicating that bulls have the upper hand. 

If buyers push the price above the overhead zone of $4,031.68 to $4,381.71, the ETH/USD pair may resume the uptrend.

The pair could then rally to the psychological mark at $5,000, which could act as a stiff resistance.

Contrary to this assumption, if the price turns down from the current level, the pair may drop to the 20-week exponential moving average (EMA). If the price rebounds off this support, the bulls will make another attempt to resume the uptrend.

The bears will then have to sink and sustain the price below the 20-week EMA to gain the upper hand. 

Ether price technical analysis: daily chart

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

Ether’s price completed a bullish inverse head-and-shoulders (H&S) pattern when buyers pushed and closed the pair above the neckline on 14 October. This set-up has a pattern target of $4,699.

However, the bears are unlikely to give up without a fight. They attempted to pull the price back below the neckline on 17 October, but the long tail on the candlestick shows strong buying at lower levels.

A break and close below the neckline will be the first sign of weakness. If the bears pull the price below the moving averages, several aggressive bulls who bought after the completion of the H&S pattern may rush to the exit. That could result in a decline to $3,258.83.

On the other hand, if the price rebounds off the neckline or the moving averages, the bulls will again try to thrust the price above $4,031.68. Such a move could clear the path for a retest of the all-time high at $4,381.71. 

ETH price technical analysis: trading this week

Ether has completed a bullish inverse H&S pattern on the daily chart, which has a target objective of $4,699. However, the up-move is likely to face stiff resistance in the $4,031.68–$4,381.71 zone. A break and close below $3,600 could tilt the advantage in favour of the bears. 

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
3856.46
Low: 3742.19
High: 4218.66

Further reading: How to trade ethereum: the ultimate guide

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

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