Ethereum has been trading closely with Bitcoin in the past few days and weeks, and this correlation shows no signs of breaking.
It now seems that buyers are laying the foundation for a remarkable upturn in ETH, as crypto is now about to exceed a crucial level of support.
Much of this strength could be due to buyers' continued ability to hold them above $ 238.
An analyst notes that he's now watching exactly how ETH is responding to the resistance, which is around $ 246. He explains that a firm break above this level could trigger an intense rally that leads him towards the upper $ 200 region.
Ethereum buyers are trying to defend crucial support
At the time of writing, Ethereum is trading slightly at its current price of $ 237.
This is roughly the level it has been trading in the past few days and weeks, with buyers struggling to get a clear dynamic in both directions.
This sideways trade is mainly the result of Bitcoin's ongoing consolidation in the region with less than $ 9,000.
Until BTC gains significant momentum, it is very likely that Ethereum will continue to consolidate.
A key level to watch in the short term is $ 238 as bulls have passionately defended this support lately.
It now seems that this level is in danger of being broken.
If Ethereum closes its daily candle down here, it could be a sign that it will drift down towards the lower limit of its trading range by USD 130.
Assuming that the day can end above this level, this is an analyst taking note that $ 246 is the level of resistance that needs to be destroyed to fuel a breakout rally.
“ETH LTF Update: In the past 7 days, the bears have not seemed to have managed to return below $ 238 with conviction. I expect an outbreak soon. "
Image Courtesy of Cactus. Chart via TradingView.
The macro outlook of ETH versus BTC is incredibly bright
As NewsBTC reported last week, analysts are largely optimistic about Ethereum's macroeconomic outlook against Bitcoin.
A prominent Ethereum skeptic cited in the report even noted that he has been at ETH / BTC for a long time, even though he believes that ETH has "extremely problematic foundations".
"The technical data of ETH / BTC look optimistic, so I'm long. (I still think that ETH has very problematic foundations.)"
Image Courtesy of Tuur Demeester. Chart via TradingView.
How Ethereum will respond to $ 238 in the coming days should also give some insight into the validity of its apparent strength against its Bitcoin trading pair.
Featured image from Shutterstock. Charts from TradingView.