ethereum price has been rising over the past few months, breaking through resistance levels one by one. However, the cryptocurrency could have reached a possible inflection point.
Technical analysis
ethereum Price Analysis: The Daily Chart
On the daily chart, the market has been acting very bullish since breaking above the 200-day moving average. It has been recording consistently higher highs and lower lows, and the Relative Strength Index shows values above 50% all the time.
However, the $2,700 resistance level decisively rejected the price lower last week. Currently the market is consolidating below the mentioned level. Meanwhile, considering the availability of various support levels, investors can still be optimistic about the short-term trend.
The 4 hour chart
The 4-hour talk offers a clearer picture of the recent price action. The cryptocurrency has been forming a falling wedge pattern since failing to break above the $2,700 resistance area.
A bullish breakout of the wedge may result in a retest of the $2,700 level, while a breakout would be catastrophic as the price could fall towards the $2,100 level in no time.
Analysis of feelings
ethereum Funding Rates
While ethereum price has been gaining upward momentum, market participants have become more optimistic that eth will eventually reach a new all-time high this year. However, too much optimism could be a worrying factor.
This chart presents funding rates, one of the key metrics for evaluating futures market sentiment. Positive values indicate that buyers are more aggressive overall, while negative values show that short sellers are executing their orders more aggressively.
Analyzing the chart, it is evident that funding rates have been very positive for some time, showing comparable values to what was previously seen during the all-time high range of $69,000. As a result, the probability of a long cascade of liquidations is very high at the moment. These possible liquidations could cause a significant drop in the coming weeks.
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Cryptocurrency charts by TradingView.
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