Mapping the Market: Cryptocurrency ether coils up for next rally
By Christopher RomanoEther has been taking a breather following a white-hot rally last month, and technical analysis indicates the cryptocurrency is laying the groundwork for its next surge.Click here for a detailed technical analysis chart.After a 10-day advance that notched up a 37% gain, ether topped out at $2,564, according to data supplied by LSEG. Since then its price has been consolidating — moving very little in either direction — as previous buyers take profits and new entrants prepare for the next move. Consolidation is often a bullish sign after a spate of gains and was expected after ether vaulted higher.This sideways drift has carved out a pattern technical analysts call a "bull flag." The setup has two parts: a "pole," which is the sharp, near-vertical rally, followed by a "flag," the flat consolidation phase that follows it. Seen as a harbinger for further gains, chart watchers typically use the height of the pole to estimate how far the next rally could travel — and in ether's case, that math points to a target of roughly $3,050. Adding weight to that number, ether posted several daily highs in the $3,040-$3,060 zone back in January, creating a cluster of resistance-turned-target that could reinforce the case for a move higher.The bullish picture would fall apart if ether slipped below $2,350-$2,360, the base of the flag pattern, which would suggest the pause has turned into a genuine reversal.Adding to the bullish case, ether has managed to hold near its recent highs even as U.S. government bond yields have climbed — normally a headwind for risk assets like cryptocurrencies. That resilience could be read as an encouraging sign.Friday's U.S. consumer inflation report may prove decisive in determining which way ether breaks next.What the chart shows:Bull flag pattern forming after 37% rally to $2,564Upside target near $3,050, reinforced by January highs of $3,040-$3,060Support at $2,350-$2,360; a break below would negate the bullish setup(Mapping the Market is a daily column written by Reuters journalists. The commentary is based on a technical analysis of financial charts, which helps assess the likelihood of future price moves but does not guarantee the outcome. The column does not constitute investment advice or trading recommendations. )