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Markets tend to behave in massive cycles. One such cycle is the previous Bitcoin (BTC) price cycle from 2014 to 2017. However, within these cycles, there are multiple smaller cycles that may often repeat themselves.
A similar approach and analysis can be made for Ethereum’s Ether (ETH), which has been outpacing BTC since the beginning of the year, as most of its upward momentum has been heavily corrected to retest previous resistance levels.
What is the best time to buy ETH / USD and what potential levels can be reached in the next move? Let’s take a look at the rankings.
Ether looking for a higher low to confirm a new bullish trend
1 week ETH / USD chart. Source: TradingView
The weekly chart shows a clear breakout above the 100 and 200 week moving averages (MA) at the beginning of the year. A breakout that also caused the crucial $ 300 resistance level to be breached.
This $ 300 barrier has been a resistance zone for nearly two years, ever since the Ethereum bear market started in February 2018.
Since this accumulation period, the price of Ether has fluctuated between $ 80 and $ 300. Eventually, after nearly two years, ETH / USD broke above $ 300, reaching the next resistance zone around $ 500.
However, a breakout during this run is unlikely as the cryptocurrency markets still appear to consolidate within a new cycle. This build is relatively boring and does not provide huge volatility.
Another clear sign of this period of accumulation is the incentive to continually test each previous resistance zone for support. These new tests add further momentum for further hikes later.
The $ 300 resistance zone could most likely be the support level
1 week ETH / USD chart. Source: TradingView
a higher maximum is already established as the chart shows the current trend. After such a high high, the market looks for a higher net low to confirm the current trend change.
However, the crucial question in this regard is at what level can a higher minimum be established? The deeper answer to this question is the previous resistance at $ 300 turning into support.
But even if the $ 300 level doesn’t support, the 200-week moving average at $ 220-245 can support and confirm the higher low. These two zones should be observed for investors to see if buyers are taking action. The $ 300 level already held as support, increasing the likelihood of Ether holding above this level.
Second, as markets tend to move in substantial cycles, new potential resistances can be defined. Impulsive movement usually lasts the shortest since cumulative and corrective movements tend to take the longest period.
If the $ 300 area holds support, new resistances and levels can be defined through horizontal price levels and the Fibonacci extension tool.
1 week ETH / USD chart. Source: TradingView
The next levels of potential resistance can be found through these indicators and instruments at $ 600 and $ 775-825.
This would mean that Ethereum could rise more than 100% in the next impulse move, driving the markets to the next level. If Ethereum 2.0 is released, the strength will increase, indicating that the second level has most likely been reached.
Patience is required to buy ETH based on the BTC chart
1 week ETH / BTC chart. Source: TradingView
More arguments and analysis can be derived from the ETH / BTC chart. One of them is the construction of the interval limit between the 100-week MA and the 200-week MA, which indicates that the upward movement has been rejected at the 100-week MA.
However, another indication is given that Ethereum’s price provided weakness during the fourth quarter of the year.
The fund constructions were made in December and January, after which a large impulse movement occurred. Therefore, the best time to enter ETH, therefore, is December and January, a move that has historically rewarded patient investors.
If the fund’s construction is done and history repeats itself, potential resistance zones can be found at 0.058 and 0.072 sat, similar to the USD values.
1 day ETH / BTC chart. Source: TradingView
The daily chart of ETH / BTC shows clear support at the 0.03 sat level. However, this level of support has seen several tests, which means that another test would likely cause the price to drop further south.
This isn’t horrible, however, as the lower support level has not yet seen a confirmation test (a support / resistance rollover). Traders should watch 0.026 sats if the 0.03-0.031 sats level is lost to support.
In general, huge opportunities could arise in the markets in the coming weeks / months as 2020 comes to an end, particularly if history repeats itself.
Also, the further you enter a cycle, the larger the impulse movements will be. Another 100% + run for Ether is therefore likely to occur if the $ 450 breaks down.
The views and opinions expressed herein are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your research when making a decision.
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