Ethereum (ETH) market leader by surpassing a significant technical level for the first time in three months Bitcoin (BTC) outperformed in performance.
However, one analyst who watches price chart patterns warns against the prospect of a rapid rise in Ethereum prices.
“ETH’s Rise Might Be Short-Term”
ETH recently climbed above its 50-day simple moving average (SMA) to surpass $1,500 and hit a one-month high.
ETH price is trading at $1,566 at the time of writing, and the coin’s 50-day moving average is at $1,327.
While exceeding the 50-day moving average is generally considered a positive sign in momentum by chart-following investors and analysts, ETH’s latest rally could be different, according to Fairlead Strategies founder Katie Stockton.
Stockton expressed his views as follows:
“ETH has surpassed its 50-day SMA, improving sentiment over altcoins, but the bounce may be short-lived as short-term oversold conditions return.
The downtrend remains intact as prices are below the daily Ichimoku cloud pattern.”
Created by Japanese journalist Goichi Hosoda in the late 1960s, the Ichimoku Cloud consists of two lines: the leading A and leading B lines.
Both lines are drawn 26 days before the last candle to show future support or resistance. Crossings above or below the cloud are commonly regarded as early signs of a bullish or bearish trend change.
Stockton Warns of No Support in Ethereum between $1,000 and $490
At the time of this writing, ETH was trading within the Ichimoku Cloud, which is defined by the area between leading aperture A and leading aperture B.
Any movement above the leading aperture B is required to confirm that the cloud is broken.
“Ethereum needs a more substantial recovery in medium-term momentum to convince us that a permanent reversal is underway,” Stockton said, noting the absence of major price support between the psychological level of $1,000 and the September 2020 high of $490. cryptocurrency posed as a risk to the unit.
*Not investment advice.