After a strong uptrend driven by steady demand stabilizing the price at the important $1,500 support region, ethereum price has reached a critical resistance area, particularly the 100-day moving average.
If a breakout occurs, it could herald an imminent bullish rally.
Technical analysis
By shayan
The daily chart
Examining the daily chart, ethereum found substantial support near the crucial $1,500 resistance, triggering an impulsive surge. While this revived hope and demand in the market, a formidable hurdle lies around $1.7K, marked by the 100-day moving average.
Consequently, if buyers recapture this vital level, it could pave the way for another leg higher, potentially targeting the 200-day moving average at $1,800.
On the contrary, facing rejection could push ethereum into a consolidation correction phase, marked by increased volatility. However, as the price has already seen a notable rise, the market might require a temporary correction phase before initiating another impulsive move.
The 4 hour chart
On the 4-hour chart, a clear bullish divergence between the price and the RSI indicator and persistent demand around the $1,500 mark pushed ethereum price higher.
It brought the cryptocurrency into a significant resistance zone, encompassed by the upper boundary of a short-term falling wedge (indicated by the yellow line), the static resistance level of $1,700, and the upper trend line of a falling wedge pattern of Several months. (indicated by the red line).
This convergence of crucial barriers solidifies resistance in this price range, characterized by substantial supply. Consequently, there is a high probability that a consolidation correction stage will occur before the market decisively determines its next direction. However, if the buyers finally manage to overtake the sellers, a sudden breakout could occur, potentially triggering a strong uptrend.
Chain analysis
By shayan
There has been a notable shift in sentiment in the futures market following ethereum‘s recent price surges. This chart illustrates the 30-day moving average of ethereum Taker’s bid-sell ratio, a crucial metric for gauging sentiment in futures trading. This metric helps discern whether buyers or sellers are collectively executing more aggressive orders.
As shown in the chart, the buyers’ bid-sell ratio has grown substantially, exceeding the value of 1. This rise signifies a prevailing bullish sentiment in the futures market. This bullish trend aligns perfectly with ethereum‘s recent impulsive rise, propelling it towards the $1,700 resistance level.
However, given the significant rise in this metric, it is anticipated that the market will require a temporary pause in the trend. This pause could lead to a short-term correction stage before the market begins another substantial upward move. It is crucial to watch if the ratio maintains this momentum or reverses in the coming days. If the bullish momentum wanes, it could lead to increased volatility in the market.
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Cryptocurrency charts by TradingView.
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