After ether’s recent surge, the natural question is one of continuation potential.
The cryptocurrency hit a multi-month high of $275 on Bitstamp on Wednesday and pulled back to $255 during today’s Asian session before moving back higher to $278 at 13:00 GMT.
At the time of writing, ether is priced at $267. The consolidation seen in the last 24 hours has produced a bull flag on the hourly chart, which is a continuation pattern.
An hourly candle close above the top end of the flag at $272 would confirm flag breakout and signal a continuation of the rally from recent lows near $220. A breakout would bring the topside target of $300 on the radar.
On the flip side, if prices find acceptance under $255, the focus would shift to $230.
The odds appear stacked against the bullish scenario, given the daily RSI is signaling extreme overbought conditions.
The bulls may take off their feet from the gas pedal, allowing a descent correction, which could then end up powering a sustained move higher.
From the trading perspective, now is the best time to scale back some long exposure. If ether confirms a flag breakout, long exposure can be boosted but with tight stops as the cryptocurrency is already looking overbought.