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It’s been a little over two months since the May 19 crypto crash, but market movement remains erratic. According to Bitcoin’s downward trend, sellers continue to dominate the global cryptocurrency market. The world’s largest alt-coin, Ethereum, has followed suit and mirrored the king coin’s movement.
However, BTC’s recent recovery from $30,000 rekindled hopes of a broader recovery and triggered some significant developments in the Ethereum market. At the time of writing, ETH was trading at $2,200, up 1.76 percent in the previous 24 hours.
Ethereum Daily Chart
Since May 19, ETH’s support zone of $1,700-1,850 has been tested five times, each time triggering a rally. The most recent surge saw ETH gain 26% in four days as prices moved above their 20 (red) and 200 (green) Simple Moving Average lines. However, the ETH market was still in a downtrend, with prices oscillating within the confines of a descending channel. To break out of this pattern, buyers would need to target a move above $2,200 resistance, which would confirm a bullish outcome in the coming days.
50-SMA to limit upside?
Bulls, on the other hand, did not have an easy road ahead of them. The 50-SMA (yellow) has rejected several breakout attempts in recent months, and a similar outcome is possible given that it coincided with $2,200 resistance. A failed breakout attempt could result in a retracement towards $2,000 and the pattern’s half-line. A successful close above this area, on the other hand, could propel prices towards the upper trendline and the $2,400 mark.
Do bulls have an advantage?
On the back of buying pressure, the Relative Strength Index closed above 50-53 for the first time in over two months, which was a positive sign for ETH. Maintaining above this neutral zone in the coming days would lend support to a sustained rise. The Squeeze Momentum Indicator detected a’squeeze release’ and anticipated a move above the half-line. This indicated a possible increase in buying pressure, as well as increased volatility. The uptick in the MACD was also confirmed by the price movement of ETH, and no divergences were present.
Several indicators suggested that ETH would rise as the market began a new week. A break above $2,400 would indicate bullish strength and a breakout from ETH’s down-channel. Until such a development occurs, traders must exercise caution because the market is still vulnerable to a drop back towards $2,000.