As anticipated by a previous article, Ethereum (ETH) continued its low volatility phase near its Point of control (POC, red) that offered the highest liquidity in the last four months.
If the trading candlestick finds a strong close above the POC, ETH could aim for a test of $3,190 near its daily EMA of 200 (green). At press time, the alt was trading at $3,120.5, up 6.15% in the past 24 hours.
ETH Daily Chart
ETH closed in on green candles over the last day as buyers’ pressure noted an uptick from its liquidity range. The alt traded near its three exponential moving averages (20, 50, and 200) as the bulls steered hard to negate the sell-off post the recent rising wedge breakout.
Plotting a recent fork drop revealed a situation slightly skewed in favor of the bulls. The daily gains pushed ETH above its trendline resistance (now support) of the fork. But, with the 20 EMA (red) still refusing to look north, the second-largest crypto had a tricky road ahead.
The buyers would likely target the zone between $3,070 and $3,160 in the coming days, should ETH continue to sway above the bounds of its Pitchfork. On the other hand, a reversal from its EMA hurdles could result in a continued squeeze phase before the alt commits itself to a strong trend.
Rationale
The Relative Strength Index has seen a gradual recovery from its lows last week, but has yet to dominate key areas. He approached the neutral zone while looking to find a convincing close above the 50 mark.
The OBV corresponded with increasing buying pressure. However, any price reversals could force a short-term bearish divergence with the OBV.
The DMI lines showed steady improvement as the gap between them decreased. Alas, the ADX line showed a considerably weak directional trend for ETH.
Conclusion
The buyers would continue to aim for the $3,190 target. A close above this level could propel further recovery before the bears step in to halt their rally. A bullish invalidation could lead to a continued squeeze phase near its POC.
Finally, investors/traders should pay attention to the movement of Bitcoin. Especially since ETH shares an 87% 30-day correlation with the king coin.
