Price within a few days Ether is in a consolidation zone, ranging between $3,949 and $3,627. This is the result of the rally that took place a few days ago, which led to an raise in the price of the cryptocurrency by over 10%.
When prices consolidate, it can only be considered that they are gaining momentum to either break above or below the consolidation zone. At this point, we cannot say what price action will take next.
In this article we will see what the possible outcome of breaking out of consolidation will be. At the time of writing, ETH price is up 0.66%, trading around $3,752 above its 100-day straightforward moving average (SMA) in the last 24 hours.
Ethereum on the 4-hour chart
Looking at the Ethereum chart on a 4-hour time frame, you can see that the price is above the 100-day moving average, which suggests that the ETH price is trading at upward trend and could break out above the consolidation zone.
Furthermore, with the MACD indicator, although the MACD histograms trend below the MACD zero line, they already show signs of weakening as the histogram color weakens.
The MACD lines and MACD signal lines also move towards the MACD zero line, but as long as they are still above the zero line, it is possible to reverse the direction.
With this MACD formation, it can be suggested that the Ethereum price is still bullish and there is a possibility of breaking above the consolidation zone
Finally, using the Relative Strength Index (RSI) also to analyze price action over a four-hour time horizon, it can be seen that the RSI line is attempting to rebound after failing to break below the 50 line, suggesting that price is still bullish.
Possible outcomes for a breakout in either direction
In summary, if a breakout above the consolidation zone occurs, the ETH price could continue to rise towards the resistance level at $4,094. If the price breaks above this resistance level, it could move further upwards, creating a modern high this year.
On the contrary, if Ethereum breaks the consolidation zone, the price may start moving towards the support level of $3,263. A break below this level could result in a continued downward move towards the support level at $2,864.04.
Featured image from iStock, chart from Tradingview.com
