Ethereum price is about to break a significant resistance level after testing it for quite some time. However, there are still some hurdles that the price needs to overcome for a new bullish phase to begin.
Technical analysis
For: Edris
the daily chart
On the daily time frame, the price breaks above the key $1300 resistance level after finally breaking above the 50-day moving average. In the event of a bullish breakout, the 200-day moving average that sits at around $1,400 would be next in line, followed by the $1,800 level.
The 200-day moving average is considered a benchmark used to indicate whether the market is in an uptrend or downtrend, and a break above could lead to a medium-term uptrend.
However, there is still a considerable chance of rejection, which could lead to a drop towards the $1000 support level.
The 4 hour chart
Looking at the 4-hour time frame, the momentum is apparently fading after a bullish few days, as the price is struggling to break above the $1350 resistance level.
The RSI indicator, which has been showing an overbought signal for a while now, is also showing a bearish divergence between the last two price highs. Therefore, there is a significant probability of a bearish pullback or even a reversal around the current level.
In the event of a reversal, a quick decline towards the $1100 support area would be expected. The $1100 level would be the last resort for the bulls, the break of which would likely lead to a massive drop and further extension of the bear market.
chain analysis
For Shayan
A bull market is always accompanied by an uptrend in the Active Addresses metric as more people become interested in cryptocurrencies when their prices rise significantly. Therefore, the market is facing increased activity, with more people sending and receiving coins.
Conversely, during the bear market, people start to realize massive losses and leave as prices drop rapidly. As a result, the market faces less activity and the Active Addresses metric begins to plummet substantially.
The chart below shows the active addresses metric (30-day MA) along with the ETH price. As is evident, the metric has been declining during the recent bear market and has fallen to new yearly lows. This means a noticeable lack of activity and interest among market participants.
In general, Ethereum is going through a significant state of capitulation, and the next bull market will not be anticipated unless the capitulation ends.
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cryptocurrency charts by TradingView.