Ethereum is still looking strong as a new support level is made at 1200.

As discussed last week, in order for Ethereum to break out of its downtrend, it needs to make a higher low followed by a higher high. This is the classic reversal signal from a downtrend into a new uptrend.

Looking at the Ethereum price action since last November, we see a clear downtrend as indicated by a series of Lower Highs (LH) and Lower Lows (LL).

This is why the recent bounce on Ethereum is so important, as we have formed the first Higher Low (HL) in the past year. A higher low is the first signal before a major reversal.

Following the recent rally, we need to watch the next few weeks closely as the recent higher low at 1200 needs to hold in order for the reversal scenario to continue for Ethereum.

If Ethereum dips back below 1200, the higher low made in October would be invalidated and the downtrend continues.

If Ethereum does stay above 1200 and bounce back in the short term, it would create a strong signal and we can wait to monitor its reaction at the 1950 resistance.

The final area to watch for Ethereum is at the 1950 resistance. If Ethereum can break above 1950 and form a new Higher High (HH), this would produce a classic trend reversal signal. Following this signal we are likely to see 3-6 months of uptrend for Ethereum to rally into the 3k ranges.

Still a bit too early to call the bottom on Ethereum, but it is looking brighter than Bitcoin as early signs of a new uptrend is forming.