ETH With Massive Surge Above $2K, But Is A Correction Coming? (Ethereum Price Analysis)

Technical analysis

By Commercial fury

ethereum price finally trades above $2,000 again. Investors are more optimistic than ever, hoping that a new bull market has begun and that the price of eth is destined for a new ATH in the coming months. However, it is advisable to be cautious after major price movements.

The daily chart

On the daily chart, the price rose significantly yesterday after being supported by the 200-day moving average around the $1,800 mark. The market has broken out of the large descending channel, indicating that a new bullish wave is coming. However, at the moment a short-term consolidation or correction seems very likely.

The price has reached the $2200 resistance level and the Relative Strength Index is also showing a clear overbought signal.

As a result, a pullback to the $2,000 level is very likely, and a deeper fall towards the upper trend line of the broken channel is also possible.

The 4 hour chart

The 4-hour chart shows a classic bullish continuation pattern. The price recovered for the first time from the $1,550 level in October.

The market then went through a few weeks of accumulation phase, consolidating below the $2,000 level and creating a clear price range. Finally, yesterday’s price rally was a direct result of the long accumulation phase of the past few weeks, and the price is currently testing the $2,150 resistance zone.

Meanwhile, just like the daily time frame, the relative strength index indicates an overbought state of momentum. Therefore, a fall towards the $2,000 level or even the midline of the accumulation range at the $1,850 mark can be expected in the near term before a new move higher.

Analysis of feelings

By Commercial fury

Financing rates

ethereum price soared more than 10% yesterday, surpassing the key $2,000 level. However, the derivatives market is showing a rather worrying sign that market participants should carefully consider before taking any action.

This chart represents ethereum funding rates, which is one of the prominent metrics for futures market sentiment assessment. Positive values ​​show optimism and negative values ​​show pessimism in futures traders.

While positive funding rates are necessary for any bullish trend, there is a concept of “too high” for this metric. Following yesterday’s price surge, funding rates have spiked sharply, reaching levels last seen during the final phases of the 2021 bull market. Therefore, a correction or even a full reversal could be on the horizon as result of a possible cascade of long-term liquidations.

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