A key signal that flashed on the Bitcoin chart before its 2017 rally has been sighted back in the crypto market. But, this time round it has been spotted on Ethereum, the second largest cryptocurrency by market cap.
The indicator, known as Ichimoku Kinko Hyo was spotted by a Twitter-based crypto analyst @onemanatatime stating that Ethereum’s price had crossed above the Ichimoku cloud. The analyst drew comparison between this recent occurrence with that of Bitcoin back in April 2016 as a bullish indicator.
— Alunaut (🌎, 🌎) (@onemanatatime) February 21, 2020
The similarities between the 2 charts point to a potentially significant upward price surge for Ethereum, just like Bitcoin did over 3 years ago. Notably, when Bitcoin crossed above the Ichimoku cloud it begun its historic run with its price rising by $4,593% from around $430 in April 2016 to its all-time highest price of $20,089 in Dec 2017.
With Ethereum trading at around $255 during the occurrence, then a rally similar to that of bitcoin would propel its price to around $11,712. This valuation would be more than 8x its previous all-time high set back in January 2018.
The Ichimoku Kinko Hyo, commonly shortened as Ichimoku, is a technical indicator used to gauge the momentum of an asset price together with its support and resistance levels in the future. The indicator, originally designed by a Japanese newspaper writer, combines 5 different parameters and uses a variety of technical strategies to interpret the market. It may seem complicated to novice traders but is widely utilised by more seasoned investors in conjunction with other technical analysis techniques to provide reliable signals and indicators about the general direction of the market.
However, the cryptocurrencies market continues to be highly volatile with random and substantial price swings occurring on a regular basis. As such, the direction Ethereum will take will largely be determined by the market forces of demand and supply, at least in the long term. In the long-term though, it would be worthwhile to anticipate a bull run based on the Ichimoku indicator.
This news of a potential Ethereum price charge comes at an opportune time as the second largest cryptocurrency is in the midst of an upward momentum. Its value has almost doubled between the turn of the year and the time Ethereum crossed the Ichimoku cloud. It rose around 96% from its opening price of $130 to $255 by the time of the occurrence. This may serve as a sign of the good things to come for the Ethereum investors.
Image courtesy of pixabay
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