Over the past 24 hours, Ethereum managed to breach above $240 again after dropping below the range on 9th July. The asset was valued at $244 at the time of writing and rising to reach $245. With a market cap of $27 billion, Ethereum was the only asset in the top 5 to register a positive incline over the past day. However, analysis suggested that the current scenario could be short-lived as the asset is possibly looking at bearish corrections over the short and long term.
Ethereum 1-hour chart
As illustrated in the above chart, Ethereum facilitated the formation of a rising wedge pattern which nears completion over the next few hours. The possibility of a pullback towards $240 increases upon completion and the asset might oscillate between $240 and $236 again over time. Trading volume has continued to remain low in the charts which suggests that the recent hike did not have a strong base, which provides further evidence of weak rally.
However, market indicators remain positive at the time of writing, with the Relative Strength Index taking the side of the buyers in the chart. MACD also exhibited a bullish scenario at the moment with the blue line hovering over the red line at the time of the press.
Calm before the storm?
For Ethereum, the long-term scenario is not panning out to be ideal as well. As observed in the above chart, Ethereum has tested the resistance at $250 for a total of three times since the start of June. Considering the asset re-test support at $216 over the next few weeks, a triple-top pattern will be completed, which may have severe implications on its valuation. Now a case can be made that the asset has maintained higher consolidation over the past month but with volatility decreasing across the industry, buying pressure could be possible exhausted in the current market.
Without the support of another bullish rally, things may take a dire turn for Ethereum but considering the 200-moving average remains a strong support, there is still hope for Ethereum to maintain a higher position in the charts.
Ethereum faces a re-test of resistance at $240 for the time being but the long-term faith could be decided over the next couple of weeks in July.