Technical Analysis

By TradingRage

Ethereum’s price is finally trading above $2,000 again. Investors are more optimistic than ever, hoping that a new bull market has begun and ETH’s price is destined for a new ATH in the coming months. Yet, it is wise to be cautious after significant price movements.

The Daily Chart

On the daily timeframe, the price surged significantly yesterday after getting supported by the 200-day moving average around the $1,800 mark. The market has broken above the large descending channel, indicating that a new bullish wave is on the horizon. However, a short-term consolidation or correction seems very likely at the moment.

The price has reached the $2,200 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 highly probable, with a deeper drop toward the higher trendline of the broken channel also possible.

The 4-Hour Chart

The 4-hour chart depicts a classic bullish continuation pattern. The price first rebounded from the $1,550 level in October.

Then, the market 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 in the last few weeks, and the price is currently testing the $2,150 resistance zone.

Meanwhile, similar to the daily timeframe, the Relative Strength Index indicates an overbought state in momentum. Therefore, a drop back toward the $2,000 level or even the mid-line of the accumulation range at the $1,850 mark can be expected in the short term before a further move higher.

Sentiment