After a bearish correction phase, the price has reached a crucial support zone, defined by the 100-day moving average and the 0.5-0.618 Fibonacci levels.
Given the strong demand at the moment, a bullish rally seems likely in the medium term.
By shayan
The daily chart
A close examination of the daily chart reveals that ethereum has entered a significant support zone following a corrective pullback. This zone spans the price range between the 0.5 ($3,421) and 0.618 ($3,289) Fibonacci levels, coinciding with the critical support of the 100-day moving average ($3,387).
This area is primed for potential demand, where market participants could be inclined to open long positions.
Considering these factors, an increase in demand is expected, leading to a bullish reversal in the medium term that will target the $4K resistance. However, if the price falls below this support, the next important line of defense for buyers will be the 200-day moving average.
The 4 hour chart
The 4-hour chart clearly shows ethereum's recent corrective move, with the price forming a bullish continuation flag pattern.
If the price breaks the upper boundary of this pattern, it indicates a possible continuation of the uptrend. Currently, the cryptocurrency is near the lower boundary of this flag, lining up with the critical support around $3.3K.
If buyers re-enter the market and demand increases, the price is expected to break the upper limit of the flag at $3.6 thousand, leading to a strong uptrend towards the resistance at $4 thousand.
On the contrary, if the sellers push the price below the $3,300 support, a drop towards the substantial $2,900 support is likely. In the medium term, the price is expected to remain within the range of $3.3k to $3.6k until a breakout occurs.
By shayan
While ethereum is currently in a critical support region with significant potential demand, analyzing future market sentiment is essential to forecast its next moves.
The chart below highlights ethereum's funding rate metric, which indicates whether buyers or sellers are executing orders more aggressively. Positive funding rates suggest bullish sentiment, while negative rates imply bearish sentiment.
The funding rate metric recently showed a notable rise after a period of slight declines, which coincided with a corrective phase in the price of ethereum.
This rally suggests that demand is present near the crucial support level of $3,300, which could halt further downward pressure and initiate a bullish reversal. If the funding rate metric continues its upward trend, it indicates that futures market sentiment is turning bullish, making a medium-term bullish reversal more likely.
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Cryptocurrency charts by TradingView.
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