The beginnings of a technical rebound for the prince of cryptos? – Being very close to yielding below the $1700 support, Ethereum (ETH) is making a strong comeback, gaining around 10% on Monday. Indeed, some economic statistics suggest that the peak of inflation has been partially reached. Immediate consequence: a good performance of the main equity indices during the past week.
Although the prince of cryptos did not initially benefit from this renewed risk appetite, he could quickly regain altitude. However, this would not call into question a bear run that began since its last ATH in November 2021. If the latest technical analyzes show us an ebb in bearish pressure since May 12, the market scenario could unfortunately be limited to a technical rebound.
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Ethereum – The end of the black series?
Despite an eighth consecutive week of decline, Ethereum is off to a good start, bouncing back to the symbolic $2,000 mark. Nevertheless, caution is in order. We will have to wait a few days to determine whether or not the situation leans towards a technical rebound towards its tidy or horizontal channel (orange rectangle) at the resistance of $2300.
In this hypothesis, it is clear that this would not change the current bear run. Especially since the headwinds on the graphic level remain firmly anchored in weekly units. First, the prices of ETH and the Chikou Span despite their respective rebounds on the $1700 support, remain well below the Kumo (cloud). Second, the downline unfortunately settles comfortably to the chagrin of potential buyers. And third, the weekly Kijun is sliding towards the bottom of the cloud, the Senkou Span B (SSB).
As we mentioned last week, the most we could hope for so far would be a closing of the gap between prices and the most volatile Ichimoku curve, the Tenkan. This would bring the Prince of Cryptos back inside his tidyallowing him to end this black series since the last failure to date below the resistance of $3400. On the other hand, the next resistances prove to be complicated to cross to such an extent that the prospect of future Kumo would not encourage a favorable trend reversal.
Ethereum – Prices above the Tenkan in daily units
If investors are looking for reassurance that a technical rebound is possible, Ethereum prices are poised to confirm the Tenkan breakout in daily units. However, in view of the violent rise on Monday, we could see a slight downward or sideways ebb before rallying the Kijun, which itself is located not far from the bottom of its tidy at $2300.
But again, this remains a bullish respite. Firstly, a return towards $2300 would risk seeing prices collide with the significant thickness of future Kumo. A dissuasive barrier in the context of a trend reversal. And on the other hand, the Chikou Span will remain under the cloud no matter what.
Assuming that Ethereum crosses $2300 and takes the opportunity to reintegrate its range, the hardest part is yet to come. Not only the descending line, one of the pillars of the current bear run, would constitute a major obstacle against new buying tendencies. But in parallel with the weekly chart, it would feel the trap par excellence to trigger new episodes of stress.
Ethereum’s bear run since its last ATH in November 2021 is beyond doubt. Admittedly, we have temporarily ruled out the $1400 nightmare scenario. But the fact remains that investors should be prepared for technical rallies to come up against major resistance. In this sense, it would start if the prices of the prince of cryptos approach the resistance of $2300.
Even if it were to go beyond that, the crisis of confidence in cryptos linked to the collapse of the UST could be felt sooner or later. Ethereum would then evolve into a minefield. And as if that were not enough, the reversal levels to return definitively to the right side of the barrier are far from current prices. Especially since the evolution of the Ichimoku in weekly units leaves one wondering about its ability to thwart the bear run.
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