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In our previous Ethereum analysis Ethereum Bullish Pattern Holding Strong! Can This Support Hold?, we talked about the Horizontal Channel Pattern currently forming on the Ethereum 4-hour timeframe.
This pattern is a high-quality bullish pattern that offers us key levels to watch for price to find support or resistance in the coming days. And right now, Ethereum is testing the channel resistance on the 4-hour timeframe.
Can price breakthrough or should we expect to see another sell-off to the downside in the coming days?
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Ethereum Horizontal Channel Pattern
The Horizontal channel pattern is a bullish pattern that points to a likelihood of a price surge on Ethereum. However, for this bullish rally to get on the way, Ethereum needs to break through the resistance channel of the pattern.
And this bullish breakout needs to occur on the Ethereum 4-hour timeframe.
Right now Ethereum is testing that key resistance with a possibility of price breaking through or crashing back down in the coming days.
Scenario 1: ETH Bullish BreakOut?
For the ETH bullish breakout, we want to see the price break through and close above the resistance channel on the 4-hour timeframe.
A bullish breakout like this is the indication we need to confirm the start of the Ethereum rally higher. But right now, that breakout is yet to happen on Ethereum and until it does the best thing to do as a pro trader is to stand aside and wait.
Scenario 2: ETH Key Level Holds?
If Ethereum fails to break through that 4-hour channel resistance, there is a very high probability that we might see another sell-off to the downside soon.
This sell-off would likely push the ETH prices back down the Horizontal Channel pattern support level on the 4-hour timeframe.
Final Verdict!
Waiting for a bullish breakout confirmation for the Ethereum price on the 4-hour timeframe is the best way to trade this Horizontal Channel pattern currently forming on the 4-hour timeframe.
Until a breakout like this happens there is a very high probability that the ETH price might just continue to range within this pattern.
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