Ethereum Price Movement Analysis for 31st July, 2021

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After three attempts since 22 June, Ethereum’s latest rise above $2300-$2400 saw the price finally break north of its horizontal channel. While this was a significant bullish development, reinforcing ideas of a likely recovery to record levels, there are still a few uncertainties.

At the time of writing, ETH was trading at $2,460, up 4.9 percent in the previous 24 hours.

Ethereum 4-hour chart 

The next resistance level for ETH is $2,550-$2,650, and failure to break through this level will result in a correction for the digital asset. This would most likely result in ETH returning to its pattern’s upper trendline.

As ETH saw a lot of interest around $2,360, the POC of the Visible Range was also close to this trendline. The anticipated retracement would provide traders with shorting opportunities, but there appeared to be an element of risk in such a position.

Reasoning 

The Relative Strength Index has been moving in an ascending channel and may be approaching the oversold zone in the coming trading sessions. Such a move would necessitate stabilisation before ETH’s next upward push.

See also  Augur, Crypto.com Coin, XRP Price Movement Analysis for 2nd February 2021

The +DI of the Directional Movement Index remained above the -DI, but the two lines did converge, indicating a decrease in buying pressure. The MACD also showed a slight bearish divergence, with lower highs.

Conclusion

There is a risk that bullish momentum will fade as the price approaches the $2,550-$2,650 resistance zone. Traders could profit from this by shorting ETH once it reaches its upper limit.

Take-profit can be set just above the POC of $2,370 for the Visible Range. However, such a setup carries a high level of risk. If Bitcoin breaks above $42,000, it will be supported by high volumes.

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