As before, cryptocurrencies are on the rise: holding around the $ 50,000 mark and others like, and all breaking out to the top. Indeed, after Monday’s big breakout, it looks like ETH / USD could continue to gain. Is it now possible to break out to a new record high?
Bitcoin has been fighting for several days to jump over the $ 50,000 hurdle. The longer the mother of all cryptocurrency stays here, the greater the resulting movement will be, provided the price decides to go further up.
Should Bitcoin actually break out, this should also give the Altcoins an additional boost. But while BTC is still struggling to make a decision, some of the altcoins are already on the move, not least of all.
After the breakout on Wednesday, ETH / USD consolidated its gains on Thursday. At the start of trading on Friday, it looked like ETH was going to go higher after briefly moving below Thursday’s low. At the time of this writing, ETH / USD was near the daily highs and on the verge of breaking out to a new multi-week high and towards the next psychological hurdle of $ 4,000.
The path of least resistance is clearly up, and I don’t see why Ether should not hit the $ 4,000 hurdle in due course, or even make a new record high above the May high of $ 4,352. If it reaches a new high, everything revolves around the question of how things will continue. I estimate Ethereum can hit the $ 5,000 mark where the 127.2% Fibonacci extension level is.
But let’s not rejoice too soon. Crucially, ETH / USD also maintains the breakout above the short-term resistance at around $ 3840. Should this not succeed, there is a risk of a sharp pullback in the course of closing out the disappointed Ether bulls. In this possible scenario, ETH should initially fall to the next major support area around $ 3,350 before we may see a spike again.
Regardless of short-term developments, the longer-term technical outlook for ETH / USD remains positive, after all it is comfortably above the simple 200-day moving average and the faster exponential 21-day average is also pointing up. In addition, prices are moving within an upward channel, which is another strength signal.
So I would focus on buying the dip on or around the support. On the way there, I would realize partial profits from the brands mentioned above.
However, it is important to keep some money invested in cryptocurrencies in case Bitcoin does as it did last year. You will never know 100% what the markets are going to do, but to benefit from a potentially big rally you have to be there. Realizing partial profits reduces the urge to close the position completely – and possibly too early.