Can ETH rally to $2,700 after finding support at this critical level?

ethereum price has been trending lower over the past few months but has found support at a critical level.

Meanwhile, the market has yet to demonstrate a bullish turn.

Technical analysis

By Edris Derakhshi

The daily chart

On the daily time frame, the asset has recently been rejected from the resistance level of $2,700 and has gradually declined towards the support zone of $2,200.

While this zone has once again contained the price, the market is yet to show a significant rebound. With the RSI also below 50%, the momentum still favors a bearish continuation. Therefore, a break below the $2200 level remains likely.

The 4-hour chart

Looking at the 4-hour chart, it is evident that the market has been on a gradual rise, making higher highs and higher lows since it bounced off the $2,200 support level.

However, bullish momentum is still lacking and the market would need to break at least the $2,700 level before a long-term bullish reversal can be expected. As a result, it remains to be seen whether the recent consolidation is an accumulation or distribution phase.

Sentiment analysis

By Edris Derakhshi

ethereum Exchange Reserve

While the ethereum price has already corrected significantly, market participants remain unconvinced that a bullish reversal will happen soon. However, analyzing the market's supply and demand dynamics can yield beneficial results.

This chart presents the exchange reserve metric (along with its 30-day moving average), which measures the amount of eth held in exchange wallets. These coins are considered supply since they can be sold quickly and create selling pressure.

As the chart suggests, ethereum’s exchange reserve metric has been steadily declining over the past few months. However, it is currently rising above its 30-day moving average, which indicates a potential increase in selling pressure and could lead to a further drop in the near term if not met with sufficient demand.

<!– ai CONTENT END 1 –>