Bitcoin [BTC] attempts to break from the $17,000 resistance on Jan. 4 supported Ethereum [ETH] to reach the $1,300 mark. However, BTC faced rejection at $16.95,000, stalling ETH’s rally at $1,270.
The price action over the past several hours has formed a descending triangle pattern on the 2-hour chart alongside a flagpole that could be seen as an overall bullish pennant pattern. However, investors should be cautious because technical indicators did not show any progress in the next few hours.
Can It Break Out? Regression and associated benefits are not possible, as the museum suggests.
In particular, On Balance Volume (OBV) fell, which means that buying pressure is high. RSI gradually removed from Surachat region, is also near to the head of the median, indicating a perfect pressure.
While the amount of ChikiTin (CMF) exceeds the loss of emptiness, he moved out soon and remain apart. This shows that the buyers have the upper hand, but not the exclusive ability to control the sellers.
Therefore, traders can push Ethereum lower to test the $1,247 support or the 26-period EMA of $1,246.39. However, the BTC run could push ETC even lower in the form of a breakout at the bearish target of $1,234.15.
But the explosion of convincing standards in the face will destroy that idea. Such a rally will aim for the target of $1,265.49, but the bulls need to clear several hurdles.
Ethereum Has Seen Increased Demand in Derivatives Markets
Despite the price correction, ETH still saw increased demand in the derivatives markets, as indicated by a positive and high Binance funding rate for the ETH/USDT pair. In addition, the daily active address remained unchanged despite the decrease in OBV seen on the 2-hour price chart.
Therefore, investors should look for a convincing CMF break below the zero point to support a new decline before taking a short position. In addition, the encouraging BTC will break the negative sentiment and put Ethereum into the upper; therefore should follow.