Ethereum ETH/USD was popping up over 3% higher on Tuesday, showing strength in comparison to Bitcoin BTC/USD, which was edging just 1% higher.
The crypto sector was strong compared to the general market, with the S&P 500 looking to close down 0.8%. In comparison, spot gold was rallying almost 2%, indicating the crypto sector may be following the commodity higher.
Ethereum’s increase caused the crypto to break up through a sideways trading pattern that had been holding it down since March 18. The move also confirmed Ethereum is trading in an uptrend pattern.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
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The Ethereum Chart: Ethereum started to trade in an uptrend on March 28 and has since made a higher low and two higher highs. The higher low was formed on Monday at $1,763 and the most confirmed recent higher high was printed at the $1,847 mark on Friday.
- On Tuesday, Ethereum was trading above the most recent higher high, which confirmed the uptrend is intact. If Ethereum closes the trading day near its high-of-day price, the crypto will print a bullish Marubozu candlestick, which could indicate higher prices are in the cards for Wednesday.
- If Ethereum closes the trading session with a significant upper wick, the crypto will print a shooting star candlestick, which could indicate the next local top has occurred and Ethereum will retrace to at least print another higher low on Wednesday.
- For bulls who are swing trading Ethereum, the eight-day exponential moving average could be a good level to place a stop because the indicator has been guiding the crypto higher since March 13, indicating the eight-day is a strong level of support.
- Ethereum has resistance above at $1,957 and $2,000 and support below at $1,846 and $1,717.
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