Is this still expected from Ethereum after the $3000 breach
Ethereum is currently consolidating above the $3000. A few weeks back, we emphasized the importance of moving above the aforementioned range in terms of affirming a bullish rally. Ethereum has gone forward and done just that in the past couple of weeks, but not in an ideal fashion.
While the asset currently holds a value above $3200, correction concerns are not completely out of the picture though the asset has been moving above its long-term resistance.
Has market enthusiasm overcooked bullish sentiment?
The above sub-head might take a bit of time to wrap your head around, but here is the easier narrative. At the moment, market participation is reaching a point where the market could be getting overwhelmed.
According to Ki-Young Ju, CEO of Cryptoquant, when there are too many investors taking part at the same time, the price is likely to remain more volatile and facilitate a market blowout. There are a couple of things that need to be accounted for in such a scenario.
- Possibility of larger hands to create a price spike before exiting with profits leading to a market decline
- Transaction Counts moving away from the Standard deviation leading to rise in volatility, which directly has an impact on the price
Now, according to data, transaction counts are just appearing to be above average but the situation isn’t at drastic as May 2021.
Is a market blowout possible for Ethereum?
Structurally, Ethereum should have undergone a minor correction to $2600-$2700 before consolidating above $3000. The problem is that the asset hasn’t formed any higher lows since July 21st. The ascent has been linear, which is unhealthy from a strength perspective.
So, Ethereum is indicative of a bullish position above $3000 but without any kind of pullback over the past 2 weeks. Hence, at the moment, it is completely in balance, and ETH being above $3000 isn’t significantly bullish yet.
Another potential sign for corrections can be observed with ETH‘s position being stopped right under the identified Supply Zone. Between $3200-$3400, Ethereum crumbled on 19th May 2021, so there is historical evidence of concentrated selling pressure at that particular range.
Odds are Even
An easier sub-head to understand, Ethereum’s market value is properly balanced at the moment. Either we witness a surge above $3400, or a well-timed correction to $2700 unfolds. Corrections will appear for Ether, one way or the other, but the time period remains variable.