The Ethereum price has been rising for quite some time after breaking above the $1300 resistance level. While the positive trend remains on higher time frames, some signs suggest that at least a short-term correction is quite likely.
Technical analysis
For: Edris
the daily chart
On the daily time frame, the price is rising steadily and it could reach towards the $1800 level soon. However, a short-term pullback seems imminent as the RSI indicator has been in an overbought condition for the past few days.
In the event of a correction, the 200-day moving average located around the $1,400 mark could be the first turning point, with the 50-day moving average located around the $1,300 support zone being the second major support. Still, the price could first test the $1800 level before a pullback or reversal.
In the less likely case of a bullish breakout of the $1800 resistance level on the first try, ETH could move aggressively towards the significant $2000 level.
Overall, this scenario looks unlikely in the short term, as a pullback looks much more likely.
The 4 hour chart
Looking at the 4-hour time frame, the price has reached the $1650 resistance area, but is struggling to break higher at the moment.
The RSI indicator is also showing some worrying signs in this time frame, as a clear bearish divergence has formed between the last two price highs, with the RSI showing a lower high. This classic reversal pattern could point to a likely rejection of the $1800 level in the near term.
From a classic price action consideration, the $1350 support area could continue to hold in the event of a deep correction. A valid break above the $1800 level would invalidate this scenario, but it does not look very likely at this point.
sentiment analysis
ETH open interest
The Ethereum price has been on the rise for the past few weeks after a grueling consolidation above the $1000 mark. Meanwhile, the decline in the FX reserve metric has come to a halt after a massive drop since the FTX bankruptcy.
The recent rally is likely the result of the significant decline in the exchange reserve, as many investors have withdrawn their coins from exchanges and stored them in their personal wallets, fearing that the same thing that happened to FTX could happen to it. to your preferred exchange. . Therefore, the ensuing supply shock could be one of the key factors leading to the current price rally.
However, the Exchange Reserve metric has currently stopped falling, pointing to the fact that while many holders are withdrawing ETH, others are depositing their coins to sell at a smaller profit or loss as the price has moved up relatively more.
To conclude, this metric should be closely monitored in the near term, as an increase in booking could lead to increased selling pressure, resulting in a bearish reversal.
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