Ethereum Could Form A Bullish W-Bottom, Says Market Strategist

Ethereum could form a possible w-bottom, an indicator that usually suggests a bull market, says a market strategist.

ETH Might Form A “Higher High”

Matt Maley, a chief market strategist at Tabak and Co., told MarketWatch that ETH could be moving in a bullish direction if certain conditions are met. He talked about both Bitcoin and Ethereum.

The 200 Daily Moving Average (DMA) is an important level, breaking above which would be bullish for the crypto, says the strategist. At the moment, this value is around $2,141, something ETH has already broken.

Ethereum could then go on to break $2,880, the same value as the high from late May-early June, to form an indicator called the “higher high”. The crypto has already formed “double bottoms” and a minor higher high.

ETH only needs to form a more important higher high now. Something like this would be “particularly bullish” for the cryptocurrency, according to Maley.

However, one thing to note is that Ethereum is somewhat overbought right now, based on the Relative Strength Index, which is an indicator that measures the ratio of the recent losses to recent gains.

When ETH is said to be overbought, it means the cryptocurrency is believed to be trading above its fair value. Investors “overbuy” without any investment rationale, and the price goes up. Usually, a phase of overbought is followed by a selling period.

ETH Price Analysis

At the time of writing ETH’s price floats around $2.6k, up 18% in the last 7 days. The chart below that shows the trend in the price of Ethereum over the last 6 months.

Ethereum has been on an uptrend since 20 July. Looking at the graph above, it seems that the coin is forming a “W” where the first peak was the earlier mentioned $2,880 point, with the first bottom following soon after in the third part of June.

After that, ETH forms a smaller peak early July, and another bottom on the aforementioned 20 July. Now, if ETH continues to follow the uptrend, it will return to the point of the first peak. This is the important “higher high” that’s needed for a bullish trend.

However, it’s unsure if Ethereum can break that level as the crypto is slightly overbought right now. The price could go down if investors decide to sell before the higher high is made.