Is ETH on the brink of a rally to $2,000? Bulls Need to Be Cautious at This Level (Ethereum Price Analysis)

The cryptocurrency market recently experienced a surge in different assets including ethereum which saw a significant rise.

However, as the price approaches a significant resistance level, there is a chance that it could be rejected.

By shayan

Analyzing the daily chart, it is evident that ethereum experienced an extended consolidation phase near the $1.6K support level. Finally, with increased buying interest, the price rose towards the 100-day and 200-day moving averages, located around $1,765 and $1,805, respectively.

These moving averages, below which ethereum had previously fallen in mid-August due to intensifying selling pressure, now serve as solid and dynamic resistance levels. If the price rejects within this range, it could indicate a valid pullback, which could lead to another drop towards the $1,600 support level.

Alternatively, if ethereum buyers manage to push the price above this crucial region, it could revive the bullish sentiment and pave the way for further market appreciation.

Analyzing the 4-hour chart, the recent action indicates a positive outlook among ethereum traders and suggests possible future behavior. While consolidating around the $1,600 support region, the price formed a falling wedge pattern (marked by orange trend lines), which is a well-known bullish reversal pattern among technical traders.

With increased buying pressure, the cryptocurrency recently surpassed the upper threshold of the wedge and experienced a pullback, indicating a possible upward trajectory for ethereum in the near term.

However, the recent price surge has brought eth closer to a major resistance zone. This zone includes the static resistance at $1,800 and the dynamic resistance of the upper boundary of the extended falling wedge (indicated by white lines).

This resistance area could impede the current bullish rally due to intensifying selling pressure. However, considering the active futures market, if the price breaks this critical range, it would be favorable for ethereum buyers. It could cause a rise towards the $2,000 resistance level. Traders should closely monitor these significant levels to make informed decisions in the market.

By shayan

Following a sudden drop in mid-August, there was a corresponding drop in the open interest metric, hitting a multi-month low. However, a recent increase in buying pressure has resulted in a significant price increase. These sudden market movements are usually related to sell-offs in the futures market. It is essential to investigate if this is the case again.

The chart illustrates the open interest metric, which represents the total number of open positions in the perpetual futures markets. Higher values ​​usually indicate greater market volatility.

The chart shows that the recent price increase coincided with a sharp increase in open interest. This suggests that the futures market may have been the driving factor behind the recent bullish rally. The substantial increase in open interest suggests that a brief cascade of liquidations occurred that pushed the market higher.

However, despite the continued bullish trend in the open interest metric, traders should proceed with caution. While rising values ​​could indicate possible bullish market moves, it is crucial to closely monitor this indicator as high readings could be accompanied by significant sell-offs that could lead to unexpected market declines.

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