Analysis
Ethereum bulls can force a rally to $2000, but…
Ethereum bulls were able to defend the $1880 zone upon a retest and the prices climbed back above $1900 at the time of writing, but buyers should be wary of the lack of demand behind ETH of late.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
The price action of Ethereum has been encouraging over the past few days. The bulls forced a breakout past the range highs and defended this zone as support on a retest. However, the trading volume has been in decline.
On-chain metrics pointed toward a high profit-taking ratio even after a meek upward move. Hence, even though the indicators showed bullish momentum, it was not a straightforward path to victory for the bulls.
Bearish block flipped to demand zone with the next target at $2000
Source: ETH/USDT, TradingView
The $2000 level is enormously important both technically and psychologically. In mid-April the prices found acceptance above this level, pushing as high as $2141. These gains were quickly wiped out as ETH proceeded to fall to $1750 in May.
Over the past two weeks, the resistance at $1880 was overcome and retested as support. The former H4 bearish order block was flipped to a bullish breaker, with confluence at the range highs (orange) as well.
The RSI was above neutral 50 to highlight bullish momentum. It is expected that ETH can continue to climb to $2000. The findings from the OBV were slightly ominous. They showcased the OBV failing to push higher while Ethereum prices picked their way above the $1900 mark.
It was possible that this demand could arise in the coming days, but Bitcoin’s bearish stance on the market was a threat to short-term bulls. Hence, they can look to book profits upon a sweep of the $1950-$1990 zone. Chances of a reversal from this area are not negligible.
The spot CVD concurred with the OBV’s cautionary tone
Source: Coinalyze
Although they are calculated slightly and some differences can be explained away, the spot CVD showed a similar trend to the OBV. Taken together they showed that Ethereum buyers lacked the strength of conviction.
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It has been pointed out that traders are eager to book profits due to the lack of a clear trend in recent weeks. Although the higher timeframes such as weekly were bullish for ETH, the daily chart was not as certain. It highlighted major resistance around the $2000-$2100 area.
Meanwhile, on the lower timeframes, the Open Interest surged higher alongside the prices. The funding rate also remained positive. They showed bullish sentiment in the market over the past two days.
