Chart of the day: Ether Bulls Eye new high

Cryptocurrencies continue to show strength by holding around the $50,000 mark and others like bullish and all breaking out. In fact, ETH/USD appears poised to rally further after a major breakout on Monday. Will it reach a new record high?

Bitcoin has now spent several days trying to break the $50,000 hurdle. The longer it stays here, the greater the resulting movement will be should it decide to eventually move higher.

If Bitcoin breaks higher, it will likely provide further momentum for altcoins. But while BTC is making up its mind, some of the altcoins are already on the move, not least Ethereum.

After breaking out on Wednesday, ETH/USD consolidated its gains on Thursday. Going into Friday's session, it looked like ETH would continue to push higher after the move below Thursday's low lasted just a few moments. At the time of writing, ETH/USD was near daily highs and threatened to break out to a new multi-week high and the next psychological hurdle of $4000.

The path of least resistance is clearly up and I would not bet on Ether hitting the $4,000 hurdle or even a new record high above the May peak of $4352 in due course. If it hits a new high, all attention would be on where it goes next. I expect it could continue to reach the $5,000 hurdle where the 127.2% Fibonacci extension level converges.

But let's not get ahead of ourselves just yet. It is important that if ETH/USD breaks above the short-term resistance around $3840, it holds the breakout. If this is not the case, we could see a sharp pullback as disappointed bulls cover their positions. In this potential scenario, ETH could initially fall to the next key support area around $3350 before we potentially see new strength again.

Regardless of what it does in the short term, the longer-term technical outlook for ETH/USD remains positive as it sits comfortably above the 200-day simple moving average, with the faster 21-day exponential moving average also trending higher. Prices have risen within a bullish channel, another indication of a strong market.

So I would focus on buying the dips at or around support and try to take partial profits along the way around the levels discussed.

However, it is important to keep some funds invested in the cryptocurrency in case it does what Bitcoin did last year. You will never know 100% what the markets will do, but to profit from a potentially big rally, you have to be there. By taking partial profits on the day, this reduces the urge to close your position completely - prematurely.