ETH/USD traded higher yesterday, extending the advance initiated on December 26th, after the crypto hit the upside support line drawn from the low of September 21st. That said, the bulls met resistance at 4775, slightly above the peak of November 15th, allowing a small retreat. Overall, the picture remains positive, but we are cautious over some further retreat before the next leg north.
We believe that the crypto will correct down to one of the 4545 or 4335 barriers, one of which may be the level at which the bulls could jump back into the action. If so, they could drive the action back up for another test near 4775, the break of which could challenge the record peak of 4855, hit on November 10th. Another break, above the record could allow a test at the round figure of 5000, and if that number is also surpassed, we could see extensions towards the 5230 area.
Looking at our short-term oscillators, we see that the RSI turned down after hitting its 70 line, while the MACD, although above both its zero and trigger lines, shows signs of topping. Both indicators suggest that the upside speed may slow somewhat down for now, which supports the notion for some further retreat before the next leg north.
We will start examining a bearish reversal upon a dip below 3950, a territory that provided support on November 18th and 26th. Such a dip would also confirm the break of the upside line taken from the low of September 21st and may allow declines towards the 3665 obstacle, marked by the low of October 18th. Another break, below 3665 will extend the fall towards the 3405 area, which prevented the crypto from falling further between October 11th and 13th.
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