Ethereum (CRYPTO: ETH) was trading mostly flat on Friday in consolidation. The crypto has closed each of the past six trading days within a tight 6.48% range between $2,411.90 and $2,568.12.
A long sideways trading pattern indicates the forces between supply and demand have become balanced and precedes either a trend reversal or the continuation of a trend depending on whether the bulls or bears take control.
Traders or investors who are not already in a position during a sideways, or horizontal, trading pattern can profit from entering once the stock or crypto breaks up or down from the pattern on higher-than-average volume.
The Ethereum Chart: On Friday, Ethereum was had much lower-than-average volume, which further confirms the horizontal pattern. As of about mid-day, Ethereum’s volume was measuring in at just about 133,000 compared to the average 10-day volume of 319,802.
Ethereum’s relative strength index (RSI) has been hovering below the 30% level since Jan. 20, which indicates the crypto may at least bounce up higher over the coming days. When a stock or crypto’s RSI nears or exceeds the 30% level it becomes oversold, which can be a buy signal for technical traders.
Ethereum is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading well below the 200-day simple moving average, which indicates Ethereum is in a bear cycle.
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- Bulls want to see big bullish volume come in and break Ethereum up from the horizontal pattern on high volume. There is resistance above at $2,461.63 and $2,609.02.
- Bears want to see big bearish volume come in and break Ethereum down from the horizontal pattern. There is support below at $2,317.64 and $2,150.54.
