Fractal Suggests Ethereum May Face Further Chop Before Seeing Parabolic Rally
- Ethereum has posted some mixed price action throughout the past few days, testing its all-time highs earlier this week before facing a swift selloff overnight
- The timing of the BTC selloff that placed pressure on ETH was unfortunate, as it has led ETH to mark its highs as a local top
- This means that the mid-$1,400 level may remain intense resistance for the cryptocurrency in the short-term
- While sharing his thoughts on this price action, one analyst explained that ETH is now following in Bitcoin’s footsteps
- He notes that BTC also faced a rejection at its highs following the first test, which was followed by an intense selloff
- The crypto then posted a rebound that came about right before it saw a parabolic move higher
Ethereum has been caught in the throes of pretty wild volatility throughout the past few days. The crypto rallied as high as $1,450 yesterday before losing its momentum and facing a rejection that caused it to slide lower.
BTC’s overnight weakness perpetuated this movement, causing it to see some massive downside that let it as low as $1,200 just hours ago.
The buying pressure here was quite intense and helped spark a strong rebound, and it has been rallying higher ever since.
Ethereum Rebounds from Daily Lows as Bitcoin Dictates Market Movements
At the time of writing, Ethereum is trading down over 5% at its current price of $1,300. This marks a notable slide from its recent highs of $1,450 that were set yesterday morning.
It also marks a rebound from overnight lows of $1,200 that came about in the midst of this latest selloff, with bulls currently trying to form a short-term bottom.
As long as bulls can continue guarding against a decline to its local lows, $1,200 might mark a bottom that is followed by further upside.
This BTC Fractal Could Mean ETH Will Slide Lower Before Setting New Highs
One trader recently pointed to a fractal of Bitcoin’s reactions to its all-time highs, comparing it to the reaction that Ethereum has seen throughout the past couple of days.
He notes that BTC briefly broke its highs before facing a rejection and slight downtrend, which ultimately led to a sharp selloff followed by a rebound that kicked off its parabolic journey higher.
“The similarities continue. The majority of you deserve this. Drawn into discussing the upside targets without appreciation that $ETH hasn’t completed the job in this range first. Day of consolidation at the highs, the same as BTC before heading lower. It’ll come, just not yet.”
Image Courtesy of Cold Blooded Shiller. Source: ETHUSD on TradingView.
The coming week should validate whether or not Ethereum will continue tracking this fractal.
Featured image from Unsplash. Charts from TradingView.