Ethereum (ETH) Is Back to Bullish Way After Resistance Breakout

Ethereum (ETH) has been rallying for the past three days on the back of the news about PayPal entering the cryptocurrency space and the introduction of deposit contracts for the looming Ethereum 2.0 network. Over that period, ETH gained 15% in the biggest initial spike since the end of August.

As of this writing, Ethereum’s value stands at $406, following a slight 1.77% price drop in the past 24 hours. The second cryptocurrency stays green on all time frames: its monthly gains amount to 17.55%, whereas its value on the year-to-date scale has increased by an impressive 214.5%.

YTD Ethereum chart

However, the YTD also shows that the previously smooth uptrend structure has been disfigured by the September dump, which pushed the price from this year’s high at $488 to the distinctive support level at $321, which used to be the resistance during the spring bull run. 

PayPal news and fundamental improvement push ETH out of the consolidation channel

1-day ETH/USDT chart

During the past couple of days, the entire crypto space has been buzzing about the news that came from PayPal headquarters concerning the addition of cryptocurrencies to its set of features. Certainly, the list of crypto made available for PayPal users includes ETH, along with BTC, BCH, and LTC. We won’t delve into details - you can read the entire story in our news section. Suffice to say that this initiative alone was capable of offering the whole market the much-needed push, and, consequently, allowed Ethereum to rise above the crucial zone at $400, giving us more reason to believe that Buterin’s brainchild will climb out of the trough and resume the uptrend soon.

Moreover, Ben Edgington, one of Ethereum’s key developers, announced this week that the deposit contract feature of Ethereum 2.0 is ready for implementation, while the beacon chain genesis should be introduced within the next eight weeks. It marks tangible progress that has undoubtedly contributed to the recent price appreciation.

However, we have significant doubts regarding the sustainability of ETH’s price growth, mainly because of the deteriorating situation around the coronavirus pandemic that is forcing the number of countries into the second lockdown, which, in turn, could trigger an immense selling pressure, though it’s unlikely to be as dramatic as the infamous March meltdown.

The bullish outlook on the daily time frame

The only way to mitigate the risks related to coronavirus is to have strategically placed stop-losses in case the market decided to take another nosedive. But apart from that, Ethereum is looking very bullish on the daily.

• MACD has finally made its way back into the bullish control zone without being rejected at the zero line - a very good signal that is going to be further reinforced if the price successfully tests the support zone at $388. The indicator still has a lot of room to the upside, so the price target at $480 seems feasible;
• RSI is also traveling for the oversold region within the accurate ascending channel, thus confirming the strength of bullish momentum.

To summarize, Ethereum is looking to get on the bullish path again after a couple of weeks of consolidation, but it needs to retest $387 first, or at least not to drop below the support line at $379, in which case, it could be a good entry point.

Author: Alex Paulson for Crypto-Rating.com