The Ethereum price has been ranging in this Ascending Channel Pattern for months now!
And while many traders are expecting the break out of this pattern to the upside, we on the other hand have been warning and continue to warn our readers there is a very high probability that it might not happen.
However, we do not know what price will do and cannot rule out that bullish possibility so instead, we will trade conservatively “by waiting for a clear bullish breakout in price from the Ascending Channel Pattern like the one shown below before placing any buy trade on Ethereum. “
This conservative style of trading is important especially in this kind of market condition.
Why Wait For A Bullish Confirmation Before Buying ETH
Well, the answer is simple. Ethereum has been in a downtrend since late last year. And throughout this price sell-off, we have seen the Ascending Channel Pattern form multiple times.
And every time that pattern has formed and completed on the ETH 1-hour timeframe, we see the Ethereum price sell-off sharply.
This cause of action might repeat itself again even as the Ethereum price is currently trading in a new Ascending Channel pattern on the 1-hour timeframe.
But that is not all!
A key indicator is currently flashing the sell signal on the Ethereum 1-hour timeframe. We talk more about this MACD indicator below.
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Ethereum Price/MACD Bearish Divergence!
Bearish Divergence shows weakness in price. The bearish divergence is caused when the price is moving higher while the MACD indicator keeps on moving lower. Once this happens, it signifies that the asset might be weak and ready to sell off.
Right now, the Ethereum price is rallying higher, but the MACD indicator is showing a clear sign of a downtrend.
This tells us that “while the price might be moving up, bullish volume is dying down” so sooner or later the price will reverse.
What Does This Mean For Ethereum!
Everything we have been saying since the beginning of this analysis is
Ethereum might not be ready to break out yet, the sell-off might still continue
And while many traders want to remain optimistic, we are here simply to provide you with all the facts we can find to help you make your decision. And all the facts we have found are pointing to an increased possibility of a potential sell-off.
Will this happen? We don’t know! However, the key level we are watching is the base of that ascending channel pattern.
If price breaks through this base channel, there is a very high probability that we might continue heading down.
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