Ethereum’s price recently found support at the 200-day moving average before turning strong and breaking above the 100-day moving average. While this could be a positive indicator for the medium-term outlook for Ethereum, it also risks becoming a bull trap.
technical analysis
To Shayan
daily chart
After a period of correction and a significant downtrend, the price matched the 200-day moving average and reached the support level of $1.6,000. The heavy buying pressure at this level triggered a quick reversal and an uptrend to the key resistance zone near $2,000.
Moreover, the price is above the 100-day moving average at $1.8,000, suggesting a bullish trend for Ethereum in the medium term. However, to confirm the existence of a bull market in 2023 and restore sufficient demand to the market, the price of Ethereum still needs to overcome and surpass significant resistance in the $2,000 area.
4 hour chart
In general, Fibonacci retracement tools help identify potential reversal points and correction targets during impulsive trends. As previously mentioned, the price of Ethereum has experienced a medium-term correction phase after reaching his annual high of $2.1,000 through an impulsive upward trend.
Examination of the chart shows that the bearish correction leg has found support and reversed at the 61.8% retracement level, a commonly observed target for correction phases. The prevailing buying pressure within this key range has created a solid bullish trend towards the $2,000 territory.
As this level has psychological implications, a successful breakout of key resistance near $2,000 will pave the way for a medium-term bullish trend. However, it is worth considering the bearish divergence between the price and the RSI indicator, which suggests a slight rally and possible short-term consolidation before Ethereum makes its next move.
On-chain analysis
To Shayan
Ethereum has been consolidating below the $2,000 level for the past few months after being denied a breakout. The uncertainty seen in price charts is also reflected in futures market sentiment.
This chart displays a funding rate indicator that indicates whether the futures market sentiment is bullish or bearish. Recently, after a period of market correction coinciding with the downward trend in the funding rate benchmark, prices have found support and started a strong rally.
However, the indicator has begun to show a slight upward trend during this bull market rally, suggesting that buying pressure is increasing and that participants are more likely to take long positions than short positions. ing.
While this could be seen as a bullish signal for the market, it could actually be a bullish trap and could lead to a long squeeze event, so traders should pay attention.
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cryptocurrency chart By TradingView.