Ethereum Starts to Pullback as Bitcoin Builds Support at a Big Spot

The bullish trend in Ethereum has finally started to slow down after a series of fresh all-time-highs printed earlier this week.

At this stage, there‘s some deeper pullback potential as the daily chart is working on an evening star pattern. Such formations will often be approached with the aim of a bearish move, indicating a potential near-term top after the three candle formation highlights a potential turn in the market. For this formation to confirm the daily chart would need to see today’s prices close below 4459, which would keep the door open for a deeper bearish move in Ether.

That may actually be a welcome event to bulls as there hasn‘t been much give during the topside trend with prices continually shooting-higher. Pullbacks are where trends avail themselves and how buyers respond here is going to be telling for whether the trend continues shooting up to fresh all-time-highs or whether its due for a longer break after this week’s outperformance.

On that topic of trends – there is rationale for continuation here as Ethereum remains within a rather tight trend channel thats guided the move since the October open, with the mid-line of the formation currently assisting with setting near-term support.

ETHEREUM (ETH/USD) DAILY CHART

BITCOIN BUILDS A RANGE, HOLDS BIG SUPPORT

The big event for Bitcoin so far this week is the continued defense of support around the 60k handle. BTC had peaked above the 60k marker back in April but that was short-lived, and soon led to a 56% drawdown before a coalition of support built around the 30k level.

When Bitcoin pushed up to a fresh all-time-high two weeks ago around the unveiling of the first Bitcoin ETF, price action remained surprisingly strong and after a quick 38.2% pullback, buyers have pushed back above the 60k level and thats been providing support so far in early-November trade.

At this point, the biggest concern is that buyers have had ample opportunity to push up to a fresh high but, to date, haven‘t. This highlights the fact that the bullish trend may need a longer pause before it’s ready for continuation. There simply may be more profit taking to go before Bitcoin has the sentiment built-in to support that bullish continuation thesis. But, all in all, a deductive fact that is quite bullish given that profit taking from the recent breakout has, so far, been brief.

BITCOIN (BTC/USD) FOUR-HOUR CHART

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