Ethereum Holds Key Pattern As Russia-Ukraine Tension Nears Boiling Point: How To Play The ETH Break

Ethereum ETH/USD was trading 2% lower on Friday in sympathy with Bitcoin BTC/USD and the S&P 500, which were falling about 2% and 1%, respectively. Tensions have continued to escalate following the Russian invasion of Ukraine on Feb. 23, which has added downwards pressure to the general markets and cryptocurrency sector.

The White House indicated Thursday that Russia may be preparing to use biological or chemical weapons in Ukraine as part of a “false flag” attack. On Friday, the U.S., its G7 allies and the European Union said it planned to remove Russia’s "Most Favored Nation" Status as part of its next move to subdue the Putin-led country's attacks on Ukraine.

Russia retaliated by threatening to leave American astronaut Mark Vande Hei at the International Space Station when his Russian counterparts return to earth in three weeks.

The increasingly combative rhetoric between Russia and the West has spooked traders and investors who may prefer to hold cash positions until global tensions ease.

Regardless of the headlines, however, Ethereum has developed a pattern on the daily chart, which may provide a map to guide entry and exit strategies for traders and investors who are already in, or who are thinking of entering into, a position.

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The Ethereum Chart: On Feb. 24, when Ethereum hit and bounced up from its low-of-day at the $2,317.64 mark, the crypto began trading in a symmetrical triangle pattern on the daily chart. Ethereum will hit the apex of the triangle on March 15 and both bullish and bearish traders can watch for a break up or down from the pattern on higher-than-average volume to gauge whether the pattern was recognized.

If Ethereum breaks down from the pattern, it may find support at a descending trendline that has been acting as both support and resistance since Dec. 1. When the crypto tested the trendline as support on Feb. 6 and Feb. 22, Ethereum bounced up from the area, which indicates the trendline has been recognized by algorithms.

The move lower on Friday was on lower-than-average volume, which indicates Ethereum may be running out of sellers. By late afternoon, Ethereum’s volume was measuring in at about 139,000 compared to the 10-day average of 171,638.

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• Bulls want to see big bullish volume come in and break Ethereum up from the symmetrical triangle pattern, which will cause the stock to regain the eight-day and 21-day exponential moving averages as support. The crypto has resistance above at $2,609.02 and $2,890.
• Bears want to see big bearish volume come in and drop Ethereum through the bottom ascending trendline of the triangle, which will likely cause the crypto to confirm it has entered into a downtrend. Ethereum has support below at $2,461.63 and $2,317.64.