Ethereum (ETH) Looking Overbought on Short Timeframe, After Taking $300

The crypto worm seems to have been turning during the past week especially, and as the #2 crypto Ethereum (ETH) has been perhaps a bigger story than Bitcoin (BTC). It has by now gone about 3x since the March lows, and a powerful uptrend now looks ready to form; but before that, we are likely to see some cooling from the recent runups.

Starting on the daily chart, we see that ETH has broken both its local top and the regional top from Feb-March, before the big drop. If we see a retracement from here, a hold anywhere above $260-50, and especially above $270, would be bullish.

ETH chart by TradingView

We see that the RSI is quite overbought now, which should make us wary of a selloff in the short-medium term. The histogram close today, if it closes with a downtick, would be the first downtick and days and might signal a shift.

Going to the weekly, we see that price is now carving well within the larger resistance zone marked by early 2020 and all of 2019. We cannot call a high-timeframe uptrend until this zone is taken out and held.

ETH chart by TradingView

We should pay attention to the RSI, here: if we see a trend shift before the level 71.1, it will mark a (very slight) bearish divergence in price since March. Therefore, another little push above this level will look good for the technicals. The histogram already looks good on this timeframe, with sharp divergence up.

Coming way down to the 4-hour, we see that the RSI is mostly holding up in this rally, but there is a very slight bear divergence apparent in this consistently overbought state. We should be expecting a retrace soon, even if it doesn’t come.

ETH chart by TradingView

The 8 EMA here will be the early warning shot, as it has still not been breached.

Ethereum in the last week has really put in some work. A raging uptrend has not quite been established yet, but Ethereum has really put in some work during the last week toward that end. It seems likely that a period of cool off is coming soon, but if it comes it is also likely to be short lived.

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