Ethereum (ETH) gains traction to enable the next push beyond the prior high zones of last week amid the change in momentum in support of the bulls. Earlier ETH/USD failed to maintain its early gains and turned lower at the end of the week.
*ETH rebounds from the near term support level at $1,980
*Return rally gains traction to propel beyond the $2,200 level.
*Ethereum Address activity at 35 months high
ETH’s strong bounce from significant support at $1,980 that returned near the upper pivot at $2,100 zone, has sidelined growing downside risk. A tailed daily candle was formed today and it underpins fresh recovery which requires a firm break above the $2,100 resistance zone to generate a fresh bullish signal for an extension. As traders take profit on their bearish positions a return rally gains traction to propel beyond the $2,200 level. At the time of this post, ETH/USD is exchanging at $2,070 and dropped 5% over the past week from the record high set. The market cap stands at $240.9 billion, with $29.7 billion traded in the past 24 hours.
Rising Ethereum Address Activity Precedes All-Time Highs
On-chain data can be useful for depicting the overall sentiment around a cryptocurrency, as it accurately reflects the activity taking place on the blockchain. In the case of Ethereum, daily new addresses created and addresses activity spiked ahead of the $2,145 all-time highs. Analysts usually track exchange deposits as a potential signal for a sell-off. Before the all-time high, analysts at Santiment, an on-chain analysis firm noted declining exchange deposits while stating ‘Ethereum has now surpassed $2,140 for the first time in history, address activity at 35 month high’.
ETH Daily Chart: Bullish
The ETH/USD pair peaked above the $2,100 barrier on Friday’s strong rally and hit the highest levels since late Feb. An eventual close above the former top at $2,041 is a bullish signal for the final stretch towards the next layers of strong barriers at an anticipated $2,500/$2,600. A sustained break past the high at $2,100 is needed to reinforce bullish stance for extension of bull-leg from $1,980 near term low towards $2,145 (Apri 2 high), possibly to $2,200 level.
However, a horizontal resistance line at $2,100 capped the rally for now, but the overall bullish setup of daily analysis remains supportive for further upside. Corrective dips on overbought near-term analysis should be ideally contained above the rising daily moving average (MA 50) (currently at $1,750). The firm breach beneath the MA 50 zone at $1,750 levels would weaken the structure and increase downside risk.
ETH 4-Hour Chart: Ranging
Despite a solid technical rebound from the $1,980 support level during the current session, Ethereum is still beneath the prior week’s high. Although the ETH/USD pair trades below the $2,100 mark, the four-hour time frame shows four consecutive bullish candlesticks rising trend in play. The ETH/USD pair may be set to break past the $2,100 mark, based on the size of the pattern.
On the contrary, a sustained break below $1,980 support would potentially pave the way for a move back towards $1,900 near term support, with the moving averages (4-hour MA 50) being additional bearish targets in the interim. Alternatively, if support at $1,980 holds and ETH eventually breaks through resistance at $2,100, then the price may go on to test prior reference points at $2,041 and $2,145 before deciding on its next move.
Resistance Levels: $2,200, $2,145, $2,100
Support Levels: $1,980, $1,900, $1,800
Image Credit: Tradingview
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