Potential Reaccumulation Phase Could Push Ether to Stronger Highs
Because its fast ascent from $8 to the $400s, ether has witnessed a good amount of volatility. Within the last few weeks, there’s been a spike in quantity as it pushed from its multi-month trading scope:
Figure 1: ETH-USD, 12-Hour Candles, Macro Trend
The many month’s ether spent consolidating seems to have formed a macro Reaccumulation Stage that caused a breakout of this trading range on solid volume; finally devoting our present marketplace in the $450s.
A Reaccumulation Stage is a pause following a powerful uptrend that tries to shake out weak investors in the marketplace consolidates toward the more powerful holders of a certain commodity. A Reaccumulation Stage is meant to torture the feeble holders of a commodity into finally relinquishing their market share to the more powerful market players, prior to a strong, up continuation of the prior trend kicks back in.
A Few of the Features of a Reaccumulation Stage include powerful buyback on the drops with large volume and broad candle disperse:
Figure 2: ETH-USD, 12 HR Candles, Volume and Price Movement
When analyzing trading ranges, it is paramount to contextualize the price movement and the quantity. Doing this reveals the intent of the larger market players and will help give traders insight into the possible strength (or weakness) of their investments. During the length of the trading range, it’s common to see several evaluations of both the upper and lower borders (the blue horizontal lines).
One key trait we are looking for when identifying a Reaccumulation Phase is the increase in volume as the stock (or coin at our case) starts to rally toward the latter end of their trading range:
Figure 3: ETH-USD, 12 Hour Candles, Trading Range Breakout
Even though the current market trend is marginally consolidating in such high price levels, it’s a really bullish indication that we’ve broken from this trading range and performed so on increasing quantity. This tendency demonstrates that the sector is currently dominated by requirement and all of the free-floating supply was consumed. As the market starts to examine new highs, then wait for quantity to grow to validate strength in the up direction.
ETH-USD broke out of a potential, multi-month reaccumulation phase.
Increasing volume on the move out of the trading range gives us confidence in a bullish continuation.