Ethereum has been on a rollercoaster ride lately, experiencing a rapid downturn that has left many investors worried. However, all hope is not lost as the cryptocurrency has found support in a substantial zone that includes the 100-day moving average and a critical price range between the 0.5 and 0.618 Fibonacci levels. This support zone is crucial in signaling a potential bullish rebound in the medium term.
A closer look at the daily chart reveals an extended period of corrective retracements, ultimately leading to the price finding support within the aforementioned pivotal zone. The 100-day moving average at $3050, along with the significant price range between the 0.5 ($3190) and 0.618 ($2972) Fibonacci levels, has attracted considerable demand and hindered further downward pressure from market sellers. Additionally, a minor bullish divergence between the price and the RSI indicator hints at a possible bullish resurgence, aiming to reclaim the $3.5K threshold.
Zooming in on the 4-hour chart, a descending wedge pattern has emerged during a multi-month consolidation correction. After a significant decline, the price has found support at the lower boundary of the wedge and the $3K region. Despite minimal volatility, indicative of a standoff between buyers and sellers, a noticeable divergence between the price and the RSI indicator on the 4-hour timeframe indicates the strength of buyers. This raises the likelihood of a bullish upswing in the medium term, with the next target being the critical resistance level at $3.5K.
As Ethereum shows signs of recovery, it is essential to determine the driving force behind this resurgence – spot buying or leveraged futures activity. An important metric to consider is the funding rates, where positive values signify bullish sentiment and negative values reflect fear in the market. Recent trends show a decline in Ethereum’s price, paralleled by a decrease in the funding rate metric to near-zero levels. This alignment suggests that the recent price drop has triggered the liquidation of numerous positions in the perpetual market, leading to a cooling effect on the futures market. This sets the stage for the comeback of long positions and the possibility of a fresh upward surge in the market.
Ethereum has weathered the storm and found stability in a critical support zone, hinting at a potential bullish rebound in the near future. As investors closely monitor the charts and funding rates, the cryptocurrency market remains poised for a fresh upward movement, bringing hope to Ethereum enthusiasts amidst a challenging market landscape.
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