Ethereum Showing Huge Potential
Along with Bitcoin, Ethereum is another cryptocurrency that is showing increasingly bullish price action. Ethereum has formed a huge base on its' weekly chart and is starting to approach its' all-time high, which is just under $1,500. If it can clear its' old high with conviction, there is the possibility it may begin a multi-month move upwards. There's an old trading line that "the bigger the base, the higher to space." This applies to both stocks and cryptocurrencies as the move to a new all-time high is as bullish a signal as you can get.
In addition, the old Jesse Livermore number theory comes into play. Livermore believed that if a stock could cross a significant round number such as $100, it will easily continue forward to another round price level. This is because human psychology does not change and there is an inclination by investors to buy or sell near major round numbers such as $100 or $1,500.
From a shorter-term point of view, Ethereum has gone on an amazing run since November, rocketing up from $500 to around $1,400. It can expected that some profit taking will take place after such an impressive move. However, the key is to look at how the move is digested. If major distribution takes place near $1,500, it indicates the move may be ending. If Ethereum continues to hold major support levels and consolidates in a neat and orderly fashion, it shows investors are unwilling to sell and this cryptocurrency may be setting up for another monstrous move higher.
I currently own Ethereum from a lower level and will be looking to add to my position if it can clear the $1,500 without hesitation.
If you are interested in using Coinbase to purchase Ethereum and would like to receive a $10 sign up bonus, use this link.
Full Disclosure: I currently own Bitcoin and Ethereum.
Full Disclosure: This post contains an affiliate link to Coinbase.
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