One of the most significant technical indicators pointing toward this change is the breakthrough of a descending triangle in the upward direction. This pattern is generally considered a bullish sign, suggesting that the asset could be entering a new phase of upward momentum. Since this breakthrough, Cardano has been accelerating, further reinforcing the idea that a bullish trend could be on the horizon.
Source: The possibility of a longer-term trend reversal is also being speculated upon. If continues to sustain its current momentum, it could very well signal a fundamental change in its market behavior, moving from a bearish or sideways trend to a bullish one. However, it is crucial to note that while technical indicators are promising, they are not foolproof, and other market factors could influence Cardano’s trajectory.
However, the journey ahead is not without challenges. Shiba Inu is approaching the 21 exponential moving average (EMA) resistance level. This is a crucial point for the asset, as the 21 EMA often acts as a barrier that could potentially push the price lower. If manages to break through this resistance, it could pave the way for further gains. On the flip side, failing to do so could result in a price correction.
While the uptrend appears promising, it is essential to note the lack of liquidity and trading volume, which hints at a hollow rally. A rally without substantial volume is often considered less sustainable and could be more susceptible to market manipulation or sudden price drops. Therefore, investors should exercise caution and keep an eye on trading volumes to gauge the rally’s strength.
Despite these challenges, Shiba Inu’s performance has been commendable, especially when considering the volatility often associated with meme coins. Its ability to hold onto gains and follow an upward trendline gives investors a glimmer of hope, but it is crucial to approach this asset with a balanced perspective.
The asset has recently moved past the 50 exponential moving average (EMA), a commonly used technical indicator that helps traders identify market trends. Crossing above the 50 EMA is generally considered a bullish sign, indicating that the asset might continue its upward trajectory.
However, it is essential to consider the volume and volatility accompanying this breakthrough. The current conditions suggest that Ethereum’s recent gains might not be as secure as they appear. The relatively low trading volume and market volatility indicate that we could see a reversal quite soon.
Why is this important? The 50 EMA serves as a critical resistance level that assets need to break through to maintain a bullish trend. If Ethereum fails to secure its position above this level, it could signal a trend reversal, leading to potential losses for traders who are long on the asset.
The current price of Ethereum stands at $1,671.96, which is a significant leap from its previous levels. However, traders should exercise caution. While the asset has shown strong bullish tendencies, the lack of substantial trading volume and market volatility could make this rally short-lived.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com