Ethereum, one of the leading cryptocurrencies in the market, has been experiencing a period of consolidation in the past week. As the price struggles to break above a key resistance area, many speculate if ETH has marked a local top. In this article, we will dive into technical and on-chain analysis of Ethereum to understand its current state and potential future movements.
Technical Analysis by Edris
On the daily time frame, Ethereum’s price experienced a break above the symmetrical triangle pattern and above the 50-day moving average line, located around the $1600 mark. However, the price is currently trading inside a very tight range above the broken triangle and has yet to break with confidence above the $1800 level.
If the market fails, a pullback towards the 50-day and even the 200-day moving average, located around the $1600 and $1400 levels, respectively, could be expected. On the other hand, a valid break above the $1800 level could lead to another short-term rally, first targeting the $2K level for the first time in 2023, and then targeting the $2300 area.
On the 4-hour chart, the consolidation becomes more evident, as the price has been bouncing around the $1800 resistance level. The RSI indicator has been indicating a clear bearish divergence signal for a while, which could point to a pullback in the coming days.
In this case, the $1650 level could be retested as support, followed by the $1500 level. However, it is still too soon to predict whether the bullish trend will continue or reverse, as the market has yet to decide amid the $1800 resistance.
Overall, while Ethereum is currently consolidating, there is potential for both a pullback and a short-term rally. Traders and investors should closely monitor the market and the key resistance and support levels.
On-Chain Analysis by Edris
Open interest is a metric that measures the daily number of open futures contracts and is a useful indicator for evaluating the futures market sentiment. Rising open interests are generally followed by high volatility and bearish reversals. However, the open interest has remained relatively low during the recent rally of Ethereum.
As a result, the current uptrend could still be sustained as there is a lower chance of long liquidation cascades occurring in the short term. Note that the spot market should also be considered in order to make more precise predictions.
Summary
In summary, Ethereum’s price has been consolidating over the past week, and it has yet to break with confidence above the $1800 level. Technical analysis shows potential for both a pullback towards the $1600 and $1400 levels and a short-term rally towards the $2K and $2300 areas. On-chain analysis indicates a lower chance of long liquidation cascades occurring in the short term. Traders and investors should closely monitor the market and key support and resistance levels.
