Ethereum (ETH) Ready To Make Fresh Gains After Recent Correction

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Ethereum (ETH) declined once again to the 38.2% fib extension level and has now formed a double top there. This has increased the probability of a move to the upside from here which might see the price rise all the way towards $170. We can expect ETH/USD to test the 200 moving average on the 4H time frame if it ends up rallying higher from here. If it declines below the 38.2%, then we can expect it to decline down to the 61.8% fib level at $141.3. However, there is a strong support at $144 which corresponds to the 50% fib extension level from the recent bottom and the 61.8% fib extension level from the December, 2018 low to the yearly high.

Recently, we have seen Bitcoin (BTC) decline harder than Ethereum (ETH) which is something that does not happen often. Bitcoin dominance (BTC.D) as at risk of further decline and the fact that Ethereum (ETH) can hold its ground better compared to Bitcoin (BTC) during a decline tells us that an altcoin rally might be around the corner. Ethereum (ETH) is a good buy above the 38.2% i.e. $147.45 because it could end up rallying much higher from here. If it declines below that level, then we might see it crash hard to potentially test the previous lows again. RSI on the 4H chart would be helpful to keep an eye on at this point. If it maintains its uptrend, we can expect a rally much higher. However, if the uptrend is broken, then we would be looking at the price eventually declining down to $131.9. It is important note though that ETH/USD is highly unlikely to begin another downtrend before testing the 200 MA on the 4H time frame.

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The 4H chart for ETH/BTC shows an eagerness to test the 200 moving average as well. However, it failed on the last attempt. We have yet to see if ETH/BTC can successful test the 200 MA and potentially rise higher to test the trend line support turned resistance. Ethereum (ETH) has room to rally against Bitcoin (BTC) but as we can see on the 4H chart, it is not much. The 38.2% fib extension level is what is currently holding ETH/BTC from the next decline.

If the pair decline below the 38.2%, not only are we going to see a decline down to the 61.8% but eventually much lower as Ethereum dominance (ETH.D) enters another downtrend. At the moment, Bitcoin dominance (BTC.D) is eyeing a retest of the 200 day moving average which means that this might be a good time to consider going long on altcoins after confirmation. It is important though to realize the limitations of any potential rally. The 4H chart for ETH/BTC shows us quite clearly that as long as ETH/BTC remains below the trend line resistance, there is no hope of any long term bullish reversal.

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