ethereum price finally hit a major hurdle after months of recovery. However, there are still reasons to be optimistic and think that the market can go higher.
Technical analysis
The daily chart
On the daily chart, the price has been rejected from the $4,000 resistance after rising consistently since early February.
The price has fallen to the $3,600 support level, which it currently holds. If eth recovers from here, the market could surpass $4,000 and reach a new all-time high in the coming weeks. On the other hand, a breakout can cause a drop towards $3,000.
The 4 hour chart
If we look at the 4-hour period, the price has apparently undergone a change in its structure. The market has been recording highs and lows since its rejection of the $4,000 resistance zone.
While the $3,600 support level could still hold, eth could slide lower as the Relative Strength Index shows values below 50%. Therefore, a pullback towards the $3,000 level could be expected in the near term.
Chain analysis
ethereum Exchange Reserve
The price of ethereum has been rising aggressively over the past few weeks. However, the recent drop below the $4,000 level has shocked market participants and caused panic selling by some holders.
This chart shows the exchange reserve metric, which measures the amount of bitcoin held in exchange wallets. An increase in the metric usually indicates an increase in supply, which could lead to a drop in price.
As the chart demonstrates, the foreign exchange reserve has risen above its 30-day moving average. This points to the fact that many holders are depositing their coins on exchanges with the intention of selling them. A continuation of this trend could be detrimental as it could lead to a further drop in prices in the coming weeks.
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Cryptocurrency charts by TradingView.
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