Encouraging signs for Ethereum (ETH)! Towards a return of buyers?

The reed bends but does not break– We tend to highlight the complicated times that the financial markets are currently experiencing, and rightly so. However, when we add the Covid crisis, record inflation in the United States, which peaks at 8.5%, and the war in Ukraine, we are also entitled to find that the markets are still solid. Ethereum, the eternal second project behind King Bitcoin, is thus showing encouraging signs technically. Is it possible that the worst is over? Is the leader of altcoins able to push the cryptocurrency market? Let’s go for an analysis on the assets of Vitalik Buterin.

This analysis of the Ethereum price is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.

Ethereum in weekly timescale

Ethereum price against the dollar (1W)

According to the Dow Theory, Ethereum is in bullish primary trend with troughs and rising peaks. At the end of 2021, Ethereum recorded a drop of more than 50% before finding a Support near $2,500. While the local top was made on a fragile structure called “V top”, the current bottom was confirmed in “W”. It is a much more structure solid which shows that the buyers are defending the reloading zone located between $2,400 and $2,900.

At the momentum level, the RSI is still below a bearish trendline (chestnut). The RSI would have to break this trendline to be able to find a buying force important.

Ethereum, a break and it starts again on a daily basis?

Ethereum is at strong daily support.
Ethereum against the dollar (1D)

It looks like Ethereum has found a Support at the level of the psychological round number of $3,000. An important area that has acted as support and resistance in the past. Since the break of $3,285Fibonacci extensions give a first objective in shorts reload area Between $3,800 and $4,300. Price should close above $3,150 to show that resistance to $3,000 is now support.

An interesting data comes from the OBV (On Balance Volume). It is a tool which makes it possible to identify if a movement is well supported by volume. This is currently the case as the OBV is above the resistance (brown).

All these elements suggest that it is likely to see the price of Ethereum between $3,800 and $4,300 in the next weeks. Will it be able to make a new all-time high? It is still a little early to tell, we will have to see how buyers and sellers behave if the price returns to the short reload zone.

Ethereum stronger than Bitcoin?

A few weeks ago, we identified a bullish channel on the Ethereum/Bitcoin pair. It is still relevant and is still far from the top:

Bullish channel on the chart of Ethereum against Bitcoin.
Ethereum versus Bitcoin (2D)

Ethereum is strong against bitcoin. At the beginning of March, it bounced off the support of the bullish channel. At the moment, there are no signs of weakness for Ethereum’s price against Bitcoin. This bodes well for the altcoins.

The hypothesis ” buy the rumor sell the news regarding the Merge seems to be in question with the delay of the long-awaited update. However, it will be advisable to pay attention to the price of Ethereum at the time of the arrival of The Merge. Coinbase had been IPO in April 2021 and Bitcoin had experienced a best premises in May. Something to keep in mind for the months to come.

Very low market sentiment with bullish on-chain data!

A few days ago, the Santiment site published on its Twitter account the market sentiment regarding Ethereum using data from social networks:

Very bearish market sentiment as Ethereum is above $3,000.
Very bearish sentiment on Ethereum source: Santiment.

The Santiment website – as indicated by his name – offers data from social networks. You know it, tops form in euphoric conditions and bottoms form in conditions of general fear. Market sentiment regarding Ethereum has been, according to this data, worse than during fall in May 2021.

These data complete the technique. It is known that the feelings of the actors are very important in the markets and this graph shows it again.

The amount of Ethereum on the exchanges continues to drop.  There is very little supply available on the exchanges.
Graph showing the price of Ethereum (green) and the amount of Ethereum on the exchanges (pink) source: Santiment.

This chart shows the price of Ethereum and the quantity of Ethereum available on exchanges. The offer available on the exchanges is constant fall since March 2020. It is possible that the actors are in the process ofaccumulate ethereum in preparation for The Merge update.

The market is the result between supply and demand. If there is very little supply available, it will take very little demand to make raise prices importantly.

Recent Ethereum accumulation for addresses with more than 10k of Ethereum.
ggraph showing the number of addresses with more than 10k of Ethereum source: Glassnode

After a strong Distribution As of May 2021, it looks like wallets with over 10k of Ethereum are waking up. According to this graph, these addresses have accumulated since January 2022 with strong purchases since early March. These kinds of strong pushes on these portfolios have often been followed by a sharp price increase.

Finally, Ethereum is showing resilience in the face of recent difficulties due to inflation, Covid and the war in Ukraine. Whether from a technical point of view and at the level of on-chain analyses, we can see that Ethereum probably still has some under the pedal. These elements suggest that Ethereum could find itself between $3,800 and $4,300 in the coming weeks and, perhaps, print a new all-time high. Ethereum remains strong against Bitcoin and that bodes well for altcoins. The only downside is that cryptocurrencies are currently highly correlated to the US market. The equity market will need to show signs of a return of buyers for cryptocurrencies to fully express themselves.

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