CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money before trading CFDs.

Ethereum (ETH) Price Is Ready for a Huge Breakout Over the 500 USD Mark.

November 11, 2020


Talking Points:

ETH bounced off the support at 420 USD following a rejection at 470 USD.

ETH/USD is eyeing up a symmetrical triangle breakout towards 500 USD while it continues to consolidation.

Over the past few days, ETH bulls have been working 24 hours a day to build strong higher support levels. The attention has turned to the support levels following ETH/USD rejection at 470 USD as it looks for help at 420 USD. At the time of publishing, ETH is hovering around 446 USD following a small drop below 450 USD.

The overarching trend is moving sideways as highlighted by the Relative Strength Index (RSI). However, if the bulls are not careful, ETH may restart the downward trend because of the bearish divergence of the price and the RSI.

ETH/USD daily chart:

Chart created using https://www.tradingview.com/

A bearish divergence happens when the asset is forming a number of higher lows, while the RSI forms a number of lower highs. The divergence signals that the bullish sentiment is losing momentum and selling pressure could come in to play.

ETH/USD is currently trading inside of a symmetrical triangle pattern approaching its eventual breakout. The chart pattern is built up by several converging trendlines connecting the price highs and lows. The convergence should occur at relatively equal slopes. The symmetrical triangle pattern can result in both breakouts or breakdowns.

In this situation, the price movement over the upper trendline could drive ETH towards 500 USD. The token could surge greatly in such a move as the fear of missing out creeps with investors.

However, trading below the pattern may drive ETH considerably lower. Support would be expected at the 50 Simple Moving Average (SMA), the 100 SMA, just above 400 USD, and the 200 SMA, just above 390 USD.

Open an Account. Get started in less than 5 minutes