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Ethereum continues to struggle amidst the current vicious and volatile market environment caused by the coronavirus outbreak and recession on the horizon.
But following a historic market collapse that wiped out nearly all of the asset’s gains thus far this year, Ethereum may finally be ready for a violent reversal after a pair of dragonfly doji have formed two weeks in a row on ETHBTC price charts.
Ethereum Thus Far Fails To Hold Up Against Current Crisis
Ethereum kicked off 2020 as bullish as can be, surging over 100% in just a couple of short months due to the rapid growth of the decentralized finance industry that Ethereum is often considered the backbone of.
The number two cryptocurrency by market cap led the market in rallying, and Ethereum and other altcoins vastly outperformed Bitcoin during this time.
Related Reading | Investor: Ethereum Is Poised To Replace Wall Street’s Archaic Back End
But the coronavirus crippling the economy proved to be far too much for Ethereum to withstand, and it and the rest of the cryptocurrency market came tumbling down, setting a new low for the year on USD pairs.
On the ETHBTC trading pair, however, things are looking a lot more bullish now that the asset has stabilized following the crash.
Double Dragonfly Doji on ETHBTC Pair Could Signal Powerful Reversal
Although Ethereum retraced significantly against Bitcoin after the early 2020 breakout caused the altcoin to outperform the first-ever cryptocurrency, ETHBTC is showing signs of a strong reversal.
According to weekly ETHBTC price charts, the last two weeks in a row have closed with dragonfly doji candlesticks.
double dragonflys on $ETH weekly 🐉🛩️ pic.twitter.com/RYL7bG7uS7
— tunez (evm/acc) 🎮 (@cryptunez) April 6, 2020
A dragonfly doji is formed when the asset’s high, open, and close prices are roughly the same.
The wick on either end shows aggressive buying and selling that resulted in a stalemate. The longer wick on the buying end shows that bulls were more aggressive than bears.
Doji are Japanese candlestick formations that typically indicate indecision. When this occurs at the bottom of a downtrend, it suggests that sell pressure is weakening and a powerful reversal could be brewing.
A pair of two dragonfly doji is rare, and even more significant, suggesting that bulls and bears have been equally matched. However, following weeks of downtrend, this could signal that bears are about to lose control, and bulls could push the price of the asset considerably higher.
Related Reading | Ethereum Buy Signal Hints At Sustained Bitcoin Outperformance
If Ethereum can hold at current levels, given the candlestick formations found at the bottom of the swing, a powerful surge could be next.
However, with all of the uncertainty surrounding financial markets currently due to the coronavirus and coming recession, the indecision the dragonfly doji is calling attention to could be nothing more than a pause for air before downside resumes.
Featured image from Shutterstock
