As Ethereum’s price continues to fluctuate, it has recently undergone a period of sideways consolidation. This phase came after a decline towards the critical support level of $3K. Interestingly, the cryptocurrency seems to be range-bound between $3K and $3.7K. It appears that volatility may not increase unless Ethereum manages to break out in either direction.
Upon closer examination of the daily chart, it is clear that Ethereum has been consolidating sideways after finding substantial support around the $3K mark. This support zone aligns with key Fibonacci retracement levels between $3190 and $2972. Additionally, the pivotal 100-day moving average at $2972 further reinforces the support in this area. The rebound from these levels pushed Ethereum’s price towards the upper boundary of the range at $3.7K. However, recent price action shows resistance near this boundary, indicating the presence of sellers at this critical juncture.
A more detailed analysis of the 4-hour chart reveals the formation of a sideways wedge pattern during corrective retracements. Typically, such patterns suggest a potential continuation of the bullish trend upon breaking out from the upper boundary. Despite this, Ethereum experienced significant buying pressure around the $3K support region, leading to a renewed bullish momentum that breached the upper boundary of the wedge. The dominance of buyers in the market was evident. However, upon reaching the resistance level of $3.7K, Ethereum faced rejection, prompting a slight retracement. Currently, the price has retraced back to the broken level of the wedge, possibly completing a pullback.
While Ethereum’s price shows signs of a rebound, it is essential to determine whether this is driven by spot buying pressure or leveraged futures positions. The exchange reserve metric, which measures the amount of ETH held in exchange wallets, provides insights. After a sharp increase above the 30-day moving average several weeks ago, the exchange reserve metric has now fallen below the MA once again. This indicates that investors have been withdrawing ETH from exchanges, signaling spot buying pressure. As a result, spot market demand may play a crucial role in a potential rally higher, potentially leading to a more sustainable uptrend.
Ethereum’s price movement is currently characterized by sideways consolidation between $3K and $3.7K, with key support and resistance levels in play. The formation of a sideways wedge pattern on the 4-hour chart suggests a potential continuation of the bullish trend, contingent on a breakout from the upper boundary. Additionally, the withdrawal of ETH from exchanges indicates spot buying pressure as a significant driver of the price rally. As Ethereum navigates through these critical levels and patterns, it remains to be seen whether a bullish revival will push the price above the $3.7K range or if a bearish retracement towards $3.2K is in store.
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