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The price of Ethereum is moving against the USDT in a formation that could lead the price of ETH to reach a level last seen in June 2018. So is the price of Ethereum close to a breakout? There are several indications that this is the case. Let’s take a closer look at which of these are in this analysis.
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The Ethereum course finds an old ally
Anyone who has ever taken a closer look at technical chart analysis knows that resistance turns into support and vice versa. A series of charts have recently been published in the Telegram channel of Bitcoin-Bude.de, indicating that this is currently the case with the Ethereum rate against the USDT. The trend line in question served as a support from August to September, then became a resistance for the next 2 months and appears to have re-established as a support line in the last few days.
Ethereum price prediction
The more touchpoints a trendline has, the more significant its significance is. As this trend line has been the pivot of Ethereum’s price for nearly 4 months, its importance for upcoming price movements should not be underestimated.
ETH price in a pennant formation
However, that’s not all. Ethereum’s price is also currently trading in a pennant formation. At first glance, it may seem like a symmetrical triangular formation to many, but such patterns usually have a minimum duration of 3 weeks. However, the price of Ethereum only acts its 3 days in this pattern. Therefore this formation must be classified as a pennant.
A pennant formation is a short-term consolidation pattern that is said to appear on half of a larger movement, just like a flag formation. During the formation, declining volume is usually observed and the pattern is preceded by a sharp price increase in its bullish version. As the figure above shows, the Ethereum course fulfills all these characteristics of a flag formation.
Is Ethereum’s price on the way to its 2-year high?
To calculate the minimum price target in a pennant formation, the previous movement is measured and projected to the end of the formation. If you do this in the case of the Ethereum course, you get a minimum target price of just under $ 500. This would correspond to the highest price level for ETH since June 2018.
Ethereum price prediction
However, from a statistical point of view, pennant formations show an error rate of 24%. This means that 1 of the 4 pennant formations fails and a bullish resolution does not occur. Furthermore, the minimum price target is only met or exceeded in 58% of cases. Consequently, this forecast for the Ethereum price should be taken with caution.
But not only on the technical analysis of the chart are there bullish indicators for ETH. Basically, cryptocurrency number 2 is stronger than ever and that’s for good reason.
The launch of Ethereum 2.0 is approaching
As already reported, after months the Ethereum Foundation officially announced the date of the deposit agreement for Eth2 Phase 0 and specified the Genesis event of the Beacon Chain Mainnet in an update on November 4th.
According to Danny Ryan, a lead developer, Phase 0 will begin on December 1, 2020, provided that several conditions are met. More specifically, the first phase will begin one week after reaching the minimum threshold of 16,384 32-ETH validators. Therefore, to meet the December 1st start date, this number of ETH validators must be reached one week before the date. Otherwise, the departure will be postponed accordingly.
Ethereum co-founder Vitalik Buterin already has around 3,200 ETH from his private portfolio in the equivalent of just $ 1.5 million in deposited Staking contract.
Open interest in ETH options at all-time highs
Furthermore, open interest for Ethereum options on Sunday, November 8, reached a new record of over $ 570 million. The last time open interest came close to this level was on September 1, when it hit $ 544 million.
Greg Magadini, CEO of the data aggregator Genesis Volatility, says that the progress of the Ethereum network in the transition to “2.0” has led options traders to anticipate more and more the event since the official launch of Ethereum.
On election night in the US, we witnessed the silent release of the ETH 2.0 deposit agreement. As we got closer and closer to the start of Phase 0, the excitement triggered an increase in ETH options trading volume over the past week.
As an interesting study on the 10,000 richest ETH addresses shows, the entire cryptocurrency industry has been preparing for this event for months. It is therefore very likely that the price of Ethereum will once again show its volatile side before the official launch of ETH 2.0, where probable positive price developments can be considered.
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(Featured image of elifxlite through Pixabay)
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