ethereum is aggressively approaching its all-time high, with the price on a near vertical rise. However, based on technical and sentiment analysis, a correction seems likely in the short term.
Technical analysis
The daily chart
On the daily chart, the price has broken several resistance levels since recovering from the $2,200 level in early February. The market is currently testing the $3,500 resistance level and is yet to definitively break above.
Meanwhile, the Relative Strength Index demonstrates a clear overbought signal pointing to a possible consolidation or pullback in the coming days. In this case, the $3,000 level may provide enough support to prevent a deeper decline.
The 4 hour chart
If we look at the 4-hour time frame, the price has recently shown signs of weakness and has failed to break above the $3,500 level.
The Relative Strength Index also demonstrates a bearish divergence between the two recent highs. As a result, another rejection from the $3,500 level could occur, leading to a correction towards the $3,000 area.
Analysis of feelings
ethereum Open Interest
ethereum price has been rising rapidly over the past few weeks, approaching the $4,000 mark. This has led many speculators to jump on the cryptocurrency bandwagon once again and look for substantial profits.
This chart represents open interest, which is a useful metric for evaluating futures market sentiment. Measures the number of open perpetual futures contracts across all crypto exchanges.
Open interest has also seen a sharp increase during the recent bull run. While we have already concluded that there is a logical reason for this trend, high open interest values tend to lead to higher volatility.
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Cryptocurrency charts by TradingView.
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