Cryptocurrency Ether Makes Its Break
The move follows a sharp rally in late August and has renewed attention on whether Ether can extend its gains toward higher resistance levels
Crypto ether looks set to press higher again after breaking out of a technical pattern that had emerged during weeks of relatively subdued trading, a Reuters technical analysis shows.
Ether had been consolidating after a huge rally of more than 30% in late August, which came as early bidders pocketed their profits and new investors waited to see if the cryptocurrency had legs.
The latest run in the price action has subsequently succeeded to push Ether outside of a formation referred to as a "bull flag." A bull flag is a technical set up which very often occurs following a sharp plunge within the value, and an intensifying or narrowing price within the subsequent buying and selling vary.
The breakout contributes to a more robust technical setup for Ether after its earlier advance. The cryptocurrency had previously climbed some 37 per cent over 10 days to around US$2,564, according to LSEG data reported by Reuters. The market digesting those gains ahead of the most recent move.
Meanwhile, the broader cryptocurrency markets also gained during the day. Ether was trading at about $2,700, while Bitcoin rose past $85,000 as risk appetite returned to investors in global markets.
However, now traders are closely monitoring if Ether can continue this breakout and gather some sustained momentum of a fresh rally. The former resistance levels in the crypto will serve as initial support levels while a lack of momentum might lead Ether back into its to-and-fro trading range.
Last week's unconventional step by Ethereum also unfolded amid a complex macro picture. Market participants are eyeing the interest rate trend, bond yields, the US dollar and oil prices, which all can impact the demand for risk-sensitive assets like cryptocurrencies, Reuters reported. Weaker oil prices and risk sentiment had recently helped support risk assets overall.
This breakout doesn't ensure that Ether will keep climbing higher, but it does signal a shift in the asset's recent technical landscape. Traders will be monitoring to see if the cryptocurrency can sustain the breakout move higher, or if traders take profits, sending prices back down toward former support levels.
