Tony “The Bull,” a technical analyst and the Editorial Executive at NewsBTC, now thinks Ethereum (ETH), the second most valuable cryptocurrency, is about to explode. “The Bull” cites technical candlestick formation in the ETHUSDT daily chart as a leading indicator for ETH, a coin now trading above $3,000, the highest level over two years.
The analyst pointed to the Bollinger Bands (BB), a technical indicator used to measure volatility. Though the BB is a lagging indicator, like most technical indicators, including the moving average, traders associate it with tapering volatility whenever its band narrows.
As history shows, this “squeeze” often precedes key breakout levels (in either direction) that can shape how prices evolve in the coming sessions. However, this changes whenever bands begin to expand. Usually, when this happens, asset prices, in this case, ETH, will likely rally.
Looking at the ETHUSDT monthly chart, prices have been moving higher. Despite the general optimism across the crypto markets, ETH prices have been within a tight range in the past few weeks. As a result, what’s evident in the monthly chart is a brief period of price consolidation resulting in a “squeeze.”
As ETH breaks higher, things are beginning to look up for the second most valuable coin. Trading at over $3,000, trending at April 2022 levels. Notably, the coin is within a breakout formation since prices resoundingly broke above January 2024 highs in February.
Optimism for more price gains stems from the development of the monthly chart. As bands begin to widen and monthly bull bars band along the upper BB, it suggests high volatility. Technically, whenever bars band along the upper BB, as is the case, it means that the upside momentum is strong. As such, based on this formation, the executive thinks what’s happening in the ETHUSDT monthly chart could be a precursor to an “explosion.”
Eyes On The United States SEC
What could further fuel the upswing, possibly pushing the coin above $3,500, is how the United States Securities and Exchange Commission (SEC) responds to the current spot Ethereum exchange-traded fund (ETF) applications. The approval of a spot Ethereum ETF could lead to increased institutional investment in Ethereum.
As seen from how institutions have reacted to spot Bitcoin ETFs, a similar product for Ethereum would see billions being funneled to the coin. Increased institutional investment could potentially drive up the ETH prices.
As Reddit prepares to go public, its filing with the United States SEC shows that the social media platform plans to accumulate Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC) using excess cash.
Feature image from Canva, chart from TradingView
