- ETH is on a pullback after a sharp recovery from the current market crash.
- Investors should watch the 0.236 Fib support level.
Bitcoin (BTC) recovered from the 16.69K mark to 17K, injecting a lifeline into the industry. The king coin’s gains also boosted altcoins.
Ethereum (ETH), the altcoin king, is positively correlated to BTC. As such, it witnessed a sharp recovery from $1,182 after BTC pushed to the 17K mark.
At press time, ETH was trading at $1,253 and nursing a price pullback to a Fib level that could offer buying opportunities.
Source: TradingView
BTC’s recovery nudged ETH into a price inflection, marking the zero Fib level as a support zone. At press time, ETH was healing off from a post-crash rally. We observed a price pullback on lower timeframe charts. The 12-hour timeframe chart exhibited the same trend.
The resting zone has been established at the 0.236 Fib level ($1216). The RSI retraced from the oversold territory, showing a reducing sell pressure. Correspondingly, the MFI also retraced from the oversold entrance level, showing accumulation was well underway for buyers. As such, $1,216 presents long trade entry positions with $1305 and $1307 as targets.
The bullish inclination only holds if bulls can unleash high buying pressure in the coming days or hours to sustain the upward momentum. At press time, the OBV showed a downtick after a recent upside, thus showing uncertainty about incoming volumes that could dictate a strong sell or buy pressure.
A candlestick close below $1,073 would invalidate the bullish inclination. ETH’s drop beyond this level could extend it further downwards if bears gain leverage; hence, a stop loss below it is feasible.
ETH active addresses increase after price recovery from $1000
Source: Glassnode
ETH’s active address increased after the sharp recovery from the $1,182 mark. This shows that more active addresses were involved in ETH trading when its price surged. However, at press time, ETH had dropped slightly to below $1,300, and active addresses were also reduced.
The drop in active addresses likely indicates the current uncertainty on whether the ETH price will pump. ETH’s negatively weighted sentiment further confirmed this uncertainty, at the time of writing.
Negative weighted sentiment exposes long-term ETH holders to more losses
Source: Santiment
According to the on-chain analytics platform, Santiment, ETH’s weighted sentiment, slid into negative territory after enjoying a recent positive elevation. It means the aggregated sentiment around ETH was bearish, and a slight price drop is a testament to this.
Unfortunately, the negative weighted sentiment is weighing down long-term ETH holders. The 365-day MVRV has been negative for most of the year, translating to losses.
A bearish sentiment would extend the stay in the negative territory, exposing long-term ETH HODLers to more losses.
A declining volume could deny bulls enough buying pressure
Source: Santiment
The fall in volume, as shown by Santiment, could also undermine strong buying pressure to push the altcoin king upwards.
Therefore, investors need to be patient and check if buying pressure can build in the coming days. Also, tracking BTC movement could give a clear direction on ETH’s next move.
