- Ethereum broke out of its sideways range on July 21, eventually establishing a quarter-to-date high at $280.76.
- The breakout move also confirmed a Bullish Flag pattern, a continuation signal that occurs as a brief pause following a significant price move higher.
- It has now set Ethereum en route to its ideal price target near $350. More explanations below.
Ethereum behavior over the last four months continues to point to an overall jump to higher prices.
The second-largest cryptocurrency (by market cap) surged by more than 200 percent from its mid-March nadir. Its rally meanwhile saw a parabolic upside move, followed by an overstretched period of consolidation, and an uptrend continuation later.
The entire pattern resembles that of a , a technical indicator that occurs as a brief pause after an asset’s significant price jump. The preceding uptrend is called a Pole – as in a flagpole, while the Bull Flag resembles a flag tied on the pole itself.
Ethereum pole and bull flag pattern stand confirmed. Source:
ETH confirmed the Bull Flag only after its price broke above its downward sloping consolidation, as shown via red in the chart above. Other factors that confirmed the pattern included a preceding uptrend, lesser than 50 percent downside retracement, and a move above the Flag resistance on rising volumes.
Prevailing Risks
The move upside led Ethereum to establish its quarter-to-date high at circa $280. The said level, on multiple occasions in the past two years, capped the cryptocurrency from extending its bull runs. The only exception was in June 2019, whereby ETH/USD broke above $280 to its YTD high at $363.18.
But the price fell back below it due to growing selling pressure across the cryptocurrency market.
Entering July 2020, ETH/USD is now targeting $280 to confirm its Bull Flag breakout. Until then, the pair risks correcting lower – perhaps to enter the flag all over again. Ethereum bulls are hopeful of a continuation rally towards $300, given the cryptocurrency’s growth in the decentralized space.
Ethereum Upside Targets
But for Bull Flag watchers, the ETH/USD price target is beyond $300. Ideally, a flag-induced breakout should take the pair as high as the length of the pole that preceded the pattern. That puts Etherum’s breakout target around 200 percent higher – somewhere around $750.
At the same time, readjusting the pole’s length from May 12’s low of $175 to June 2’s high of $253 brings the breakout target in proximity.
The refreshed pole’s length amounts to a 43 percent breakout rally. That puts Ethereum en route to $350, a level right between its 2019 YTD high and its vice.
[Note: Bull Flags have a history of failing. This is not financial advice. Always use multiple technical and fundamental indicators to confirm a market’s bias.]
