In mid-July, cryptocurrencies like Bitcoin and Ethereum looked as if they were going to roll over.
But at the eleventh hour the group found its footing and reversed course. This kept the charts intact and truly saved the bulls.
What we’ve seen since is a 76% rally in Bitcoin at the recent high and a 93% rally in Ethereum at Tuesday’s high.
The rally off the July lows came during “The B Word” conference, which featured speakers like Ark’s Cathie Wood, Tesla’s (TSLA) - Get Tesla Inc Report Elon Musk and Square (SQ) - Get Square, Inc. Class A Report and Twitter’s (TWTR) - Get Twitter, Inc. Report Jack Dorsey.
At the time, I asked if this trio could save Bitcoin. For now the answer is a resounding “yes.”
While Bitcoin continues to struggle with the $50,000 level, Ethereum as we speak is trying to break out. It’s hitting its highest level since May, causing many investors to wonder just how far this rally can go.
Ethereum enjoyed a bullish explosion, rallying in 16 of 18 sessions following that conference.
Amid one of those declines, Ethereum lost just 0.22% that day. The other dip gave investors a magnificent buying opportunity.
More recently though, Ethereum struggled with the $3,300 level and the 61.8% retracement near $3,355. For almost the entire month now, Ethereum has been consolidating after that powerful rally.
With Tuesday’s action, the crypto jumped to a high of $3,475 — a clear breakout of the two levels mentioned above.
But it's below $3,400 now and Ethereum’s gains are fading. I would love to see a close over $3,000 and the 61.8% retracement, as well as the prior August high near $3,381.
If it can do that, the bulls will be in control, although they’ll have to prove themselves.
It sets Ethereum up for a potential monthly-up rotation in September if it can clear $3,475, (assuming that is the high for the day).
If we can get an upward break of the recent range, it could put the 78.6% retracement on the table near $3,800. Above that and $4,000-plus is in play.
On the downside, watch $3,300. Back below that and the 10-day and 21-day moving averages will be play, followed by uptrend support. Below $3,000 and we’ll have to keep an eye on a deeper correction.