Ethereum has been consolidating alongside Bitcoin and most other major altcoins throughout the past several days.
This consolidation phase comes close on the heels of the strong upwards movement that sent the cryptocurrency surging from recent lows of $230 to highs of $415 that were set last Saturday.
Ever since it faced a rejection at this level, however, ETH has been caught within a bout of sideways trading as its buyers and sellers both reach an impasse.
It is now being subjected to heightened selling pressure, as the cryptocurrency is breaking beneath the previous support that had been built around $390.
This comes as one technical indicator flashes an incredibly bullish sign, with Ethereum’s 50-day MA now breaking out of a 500-day consolidation phase.
This means that the cryptocurrency may be poised to see significantly further upside in the coming days and weeks.
Ethereum’s Technical Outlook Grows Bright as Analysts Target Move to $420
At the time of writing, Ethereum is trading up just over 2% at its current price of $388.
Although this marks a slight decline from its daily highs of $393, it is still trading well above its recent lows of $367 that were set during a sharp selloff seen yesterday around this time.
Because this dip was aggressively absorbed by ETH bulls, it now appears that the crypto may be well-positioned to see some significant near-term upside.
One analyst recently put forth a chart with an upside target of $420. As seen on the chart he offers, ETH is currently trading within a bull flag.
A break above the upper boundary of this pennant could be the event that catapults it to these fresh yearly highs.
Image Courtesy of Byzantine General. Chart via TradingView.
In the near-term, $400 is a major resistance level that Ethereum has been struggling to break. An inability to break through this level in the coming days could be a grim sign for its near-term outlook.
This Technical Indicator Suggests ETH’s Uptrend is Just Getting Started
Another factor that may help bolster Ethereum’s near-term outlook is that its 50-day Moving Average was just able to break out of a 500-day consolidation phase.
This indicates that the cryptocurrency could now be well-positioned to enter a full-blown bull trend.
As seen in the below chart from another analyst, a similar breakout occurred in late-2015, right before ETH entered the bull phase that ultimately resulted in it going parabolic in late-2017.
“ETH MA50 about to break previous high after a 500 day consolidation,” one trader noted.
Image Courtesy of Wolf. Chart via TradingView.
Unless it faces a sudden influx of selling pressure that invalidates its near-term strength, it does appear that Ethereum is laying the groundwork for it to see another bull run.
Featured image from Unsplash. Charts from TradingView.