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In our previous ETH analysis Is This Ending Diagonal Pattern Still Valid? we identified the key Ending Diagonal Pattern and also talked about the key level the ETH bears must keep prices below for this pattern to remain valid.
Well the Ethereum bulls have continued to shrug off any attempt to slow down the price and as of today we have clearly seen the ETH price break and close above this $1,594 key resistance (invalidating our bearish prediction on Ethereum and the Ending Diagonal pattern that supported this bearish bias)
Well, the question now is what should we be expecting next from the Altcoin price? In this Ethereum analysis, we will be breaking down why we are refusing to become bullish just yet on the Ethereum price and what we believe might happen next for the Altcoin.
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Ethereum Price Surging On Drying Volume
While the Ethereum price might have refused to slow down and reverse just yet, we still believe this bullish price surge is over-extended. Up more than +30% in just a matter of weeks, we believe sooner or later we will see profit-taking start to occur by traders. This profit-taking would result in the Ethereum price becoming bearish for the short term.
But when it comes to trading, what we believe the price should do or not do does not matter. What matters are the facts on the ground, and the clear fact we are seeing right now is a gradual dry-up of bullish volume in Ethereum.
The bullish volume dry-up can easily be spotted with the Bearish Divergence currently forming in the MACD on the Ethereum 15 minutes timeframe.
Understanding Ethereum Bearish Divergence!
Berish Divergence occurs when the price keeps on moving higher but the volume of money/traders supporting that move keeps on drying up.
This is a clear sign of exhaustion and it creates a clear imbalance that might result in a shift in trend. We expect to see that shift in trend for Ethereum play out sooner or later as the Altcoin retraces some of the massive gains it made this past few weeks.
So for now, we remain bearish on Ethereum and continue to watch for the start of that bullish reversal in the Altcoin price.
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