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Tuesday, March 28, 2017

Ether Price Analysis: Miners Are Bullish — But Prepare for Pullback

Over the past week, Ethereum (ETH) made another new all-time high (ATH), increasing its market capitalization to about one-fourth that of Bitcoin.ETH hashrate also continues to show new ATHs almost daily.This suggests that miners who would otherwise currently be mining at a loss believe in the future of the coin enough to continue spending infrastructure dollars adding to the hashrate. Similarly, Bitcoin’s periods of rapidly increasing hashrate also suggest a bullish medium- to long-term future.However, Ethereum technicals tell another story. Despite making a higher high in price, it has done so on less volume and on a decreasing Relative Strength Index (RSI), an oscillator measuring momentum. This suggests that bullish buying pressure is waning and the probability of a pullback is higher than the probability of continuation. In short, buyers are exhausted. Second, there is a Rising Wedge forming, a bearish reversal pattern seen at the top of a trend, with confluence of support near the 200 EMA and 50 percent Fibonacci retracement zone, ~$32. The distance from the 200 EMA also suggests price is due for a reset. This could also be interpreted as price being heavily overbought. It has not touched the 200 EMA since January 9.The descending volume profile also suggests this is a period of consolidation. Watch for confirmation of a break up or down from the Rising Wedge with a spike in volume. This pattern should break down but it does not mean breaking up is an impossibility. Last, a modified candlestick known as Heikin-Ashi is also showing decreased momentum in this price zone.Large green bars indicate strong bullish momentum, smaller green bars waning momentum and red bars a flip in momentum. The candles bringing price to the new ATH were not as strong as the previous candles. Again, this can be read as a type of bearish divergence with a higher high in price but with weakening momentum.Should a Bitcoin hard fork occur, ETH may be seen as a safe haven asset for the time being. If so, expect price to easily soar to between $65 and $80, according to the Fibonacci extensions of the entire trend.Summary1. ETH hashrate is growing at an explosive pace, indicating miners’ bullish confidence in ETH’s future.2. Price made a new ATH on weakening bullish momentum. Expect a pullback to ~$32, a zone with confluence of support, in the near to medium term over bullish continuation.3. Should a Bitcoin hard fork occur, expect this to be a bullish event for ETH with a Fibonacci extension target of $65–80.The post Ether Price Analysis: Miners Are Bullish — But Prepare for Pullback appeared first on Bitcoin Magazine.

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