The price of Ethereum has recently seen a significant increase pushed by buyers, hitting a crucial resistance level at $2K. However, there is a chance for a brief consolidation correction phase in the upcoming days due to a major obstacle encountered at this critical mark.
The Daily Chart
A further look at the daily chart indicates strong support surrounding the critical area, which includes the lower border of the wedge pattern and the static support near $1,500. A notable increase that was driven by this support suggests that there is considerable buying momentum, with buyers aiming for the crucial $2K resistance zone.
Ethereum had resistance even after hitting this crucial level, which corresponds with the upper limit of the wedge. As a result, there was a little retreat towards the 200-day moving average, which was broken, at $1,783.
Given the importance of the resistance at $2K and the upper boundary of the corresponding wedge pattern, it is very possible that the current retracement will be temporarily extended, followed by consolidation around the broken moving averages. Buyers may reenter the market and aim once more if the price completes a pullback to the broken moving averages for the substantial $2K level.
The 4-Hour Chart
The increased buying pressure around the $1,5K support area on the 4-hour chart drove Ethereum toward the significant $2K barrier. This upward trend showed strong bullish momentum, indicating the market’s dominance by buyers.
But the $2K range is a significant psychological barrier that makes it difficult for consumers to drive the price higher. The price and RSI indicator showed a bearish divergence, which implied insufficient buying pressure and resulted in a reversal and minor corrections.
Furthermore, a well-known double-top pattern surrounding this critical resistance indicated that sellers were present in the short run.
In the medium term, there is a strong chance of a lengthy consolidation corrective phase given the current market characteristics. This suggests that the market may continue to retreat before deciding on its final course next course of action. In this scenario, the support range between the 0.5 and 61.8 levels of the Fibonacci retracement ($1,839 – $1,769) is expected to be the next level of interest for Ethereum’s price.
The futures market has had a significant impact on Ethereum‘s price dynamics, making it critical for the current uptrend to continue in this market.
The 30-day moving average of the Ethereum Taker Buy Sell ratio, an important metric for gauging sentiment in the futures market, is depicted in the chart. During a period of significant price increase in Ethereum, the taker buy-sell ratio demonstrated a strong uptrend, indicating strong buying interest. However, a recent reversal in the metric’s trend has resulted in a downtrend, with the metric falling below the 1 threshold. This reversal suggests that sellers are now executing more aggressive orders in aggregate, possibly to realize profits or to enter short positions.
If the taker buy-sell ratio resumes its upward trend and exceeds the 1 threshold, it would indicate a short-term revival of bullish sentiment, potentially supporting the uptrend’s continuation. A failure of the metric to show upward movement, on the other hand, would raise concerns about the sustainability of any bullish momentum.
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