It is a breakout. The price of Ethereum breaks out from its downtrend. It means that the downtrend has changed now, and Ethereum is back in an uptrend.
Ethereum did what it had to do. In July, it was crashing and we wrote Ethereum Price: Why $125 Must Hold. From a chart perspective, it was mandatory that Ethereum would trade above $125 for its bull market to continue. Guess what, Ethereum dropped until $130, inches from the critical price level we identified.
A breakout is a very important event. The 6 month price chart shows our point. The slope of the downtrend (purple falling line) was steep, but the price broke through it as indicated by the green circle.
The most interesting fact is is the duration of the rise and the subsequent fall:
- Ethereum rose from $15 early this year and touched $390 in June, a rise of $375 in 4 months.
- After that, Ethereum fell from $390 to $160 three weeks ago, a fall of $230 in 4 weeks.
Guess what, the retracement of $230 is EXACTLY 61%, the lowest Fibonacci retracement level.
So both from a chart perspective as from a technical Fibonacci retracement perspective this seems to be the real deal. It is a beautiful setup and points to higher prices.