One trader spotted the fractal, which employs three classic technical indicators to predict an upside trend for Ethereum.
Ethereum's native asset Ether (ETH) faces prospects of closing above $14,000 sometime in 2021 based on its current trend's striking similarity with the one from last year.
Ether price fractal
First spotted by user TradingShot, the Ethereum fractal involves three technical indicators: a 50-day simple moving average (50-day SMA), a Fibonacci channel, and a relative strength index (RSI).
Ether closed above its 50-day SMA in July 2021, the first time since the May 2021 bearish correction. As TradingShot noted, breaking above the said moving average wave historically predicts bull runs. For instance, a run-up above the 50-day SMA in April 2020 took the ETH/USD exchange rate from around $170 to over $500 in September 2020 — in only 137 days.
The period of extreme upside gains also witnessed Ether's daily RSI shooting higher from 60 (neutral) to over 90 (overbought). Meanwhile, as the cryptocurrency rallied, its price moves found interim support and resistance levels inside a Fibonacci channel.
New all-time high anticipated
TradingShot recounted multiple instances based on the April-September 2020 fractal, each showing Ether closing above its 50-day SMA and rallying higher inside the Fibonacci channel while its RSI wobbled between neutral and overbought levels. The same is happening in July 2021.
"Once [the 50-day SMA] breaks, it takes ETH either 132, 137 or 70 days to reach its next top on the Fibonacci scale," the analysts stressed. "As you see, tops are progressive one level higher each time—first 1.0, then 1.5, and the most recent in May on 2.0 Fib)."
Approximately, the 1.0 level on the next leg upward could have ETH/USD test $4,000. Meanwhile, an extended uptrend could have the pair reach 1.5 and 2.0 Fibonacci levels, which coincides with $6,000 and $9,000, respectively.
Related: Price analysis 7/28: BTC, ETH, BNB, ADA, XRP, DOGE, DOT, UNI, BCH, LTC
But TradingShot noted that on each rally after closing above the 50-day SMA, Ether's upside target progresses one level higher on the Fibonacci scale. Therefore, the cryptocurrency's next price target may be at the 2.5 Fib level, which is above $14,000. The analyst added:
"Technically, we may assume that the next Top will be at 2.5 or higher but certainly that appears to be a very high level from the current prices especially if it technically "needs" to be achieved in 137 days (or even worse 70 days) as the model suggests."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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