It has now been a little over two months since the 19 May crypto crash but market movement still seems chaotic. Judging by Bitcoin’s downwards trajectory, sellers still reign dominant in the global cryptocurrency market. The world’s largest alt- Ethereum, has been no exception to this trend and has mirrored the king coin’s movement.
However, BTC’s latest bounce back from $30,000 renewed hopes of a wider recovery and triggered some important developments in the Ethereum market. At the time of writing, ETH traded at $2,200, up by 1.76% over the last 24 hours.
Ethereum Daily Chart
ETH’s support zone of $1,700-1,850 has been tested five times since 19 May and has triggered a rally on each occasion. The most recent jump saw ETH register a 26% hike in just four days as prices moved above their 20 (red) and 200 (green) Simple Moving Average lines. However, a downtrend was still active in the ETH market as prices oscillated within the confines of a descending channel. To break away from this pattern, buyers would need to eye a move above $2,200 resistance which would provide confirmation of a bullish outcome over the coming days.
50-SMA to limit upside?
However, the path forward was not so easy for bulls. The 50-SMA (yellow) has denied several breakout attempts for the past few months and a similar outcome could follow since it coincided with $2,200 resistance. A failed breakout attempt could result in a retracement towards $2,000 and half-line of its pattern. Conversely, a successful close above this area could lift prices towards the upper trendline and the $2,400-mark.
Do bulls have an advantage?
The Relative Strength Index closed above 50-53 for the first time in over two months on the back of buying pressure and was a positive sign for ETH. Maintaining above this neutral zone in the coming days would lend weight to a sustained rise over the coming days. The Squeeze Momentum Indicator noted a ‘squeeze release’ and eyed a move above half-line. This indicated a possible rise in buying pressure coupled with rising volatility. MACD’s uptick also confirmed with ETH’s price action and no divergences were in play.
Multiple signs suggested that ETH would see higher levels as the market entered into a new week. A move above $2,400 would be a sign of bullish strength and a breakout from ETH’s down-channel. Until such a development occurs, one must trade with caution as the market was also open to a decline back towards $2,000.