Many investors were too quick to welcome Ethereum above $2,000. Indeed, the past week has unfortunately resulted in the loss of a quarter of its market capitalization. This suggests that the crisis of confidence in cryptocurrencies after the episodes of stress last spring remains ubiquitous.
Although the latest technical analysis against the second digital currency does not indicate a worrying situation in the short term, we are not immune to the bear market rally following its ATH in November 2021. markets are gradually returning to the table.
So the question will be whether the summer rally around Ethereum can continue or end prematurely in a context where risk appetite can be delayed for a while.
Is Ethereum just a bear breath from a technical rebound?
Ethereum prices are digesting last week’s strong drop. As we speak, they are trying to stay connected with $1,700 a week. Even if nothing is lost yet with the possible continuation of the technical rebound from mid-June, this key resistance needs to be quickly re-taken to signal bearish breath. Because otherwise, the summer break in the bear market would have a good chance of ending.
Moreover, it looks like sellers are taking matters into their own hands as September approaches, which is not conducive to risky asset classes. Moreover, they are not afraid of a technical rebound from the $1,000 support. And for good reason, ETH prices are still below the bearish down market line since its ATH in November 2021 and indeed favorable trend reversal points.
But the most worrisome moment for buyers concerns Weinstein’s phase 4, which itself remains intact until proven otherwise. Just look at the evolution of the trajectory of the 30-week moving average (weekly MM30) which recently broke below the lower boundary of its most recent range or horizontal channel (orange box) around $2,300.
Thus, assuming the technical rebound continues, the upside potential may be limited. The fact that the weekly 30-MA is moving parallel to the downtrend may act as indirect resistance. The latter could be an ideal meeting place for sellers. With the aim, perhaps, to start the last phase of the bear market under the sign of capitulation.
Ethereum – $1,700 Critical Threshold for Surveillance
Since the start of this week, Ethereum has returned to the $1,700 resistance. As we said earlier in the weekly chart analysis, a crossover will be necessary to extend a good summer pass. In support of a possible recovery of the MACD and RSI in daily units. the path will open to the descending line, the 200-day moving average (200 MA per day) and the lower part of its last range.
Hence, in order to consider them as critical thresholds in terms of a trend reversal, there would be a large gap in relation to the magnitude of the last wave of decline, stretching from late March-early April to mid-June. If crypto investors want a positive scenario, they will first need to re-enter the range in order to partially neutralize the ETH bear market.
However, prices may face a tough Fibonacci retracement from the last wave of decline. In a market environment filled with uncertainty, it would not be a coincidence that they fail below the 50% or 61.8% threshold.
Finally, another immediate scenario to consider could be a potential pullback below the $1,700 resistance level. It is clear that many would not like it. But, on the other hand, this will be facilitated by the resumption of volatility after the persistence of major risks in the financial markets. In this case, that would first take us to $1,400 support.
ETH – Indecisive about the upside potential of a technical rebound
Given Bitcoin’s dominance in the cryptocurrency market and its inability to overcome recent resistance, Ethereum’s technical bounce is likely to come to an end sooner or later. The failure last week not only generated a false buy signal due to the false break of the $1,700 resistance level. But even a breach of this key threshold will not contribute significant upside potential in the coming weeks.
Assuming that Fed Chairman Jerome Powell reassured us of tightening monetary policy at the Jackson Hole symposium, ETH prices could once again ward off the threat of new year lows. Otherwise, the bear market rally since its last ATH in November 2021 will lead to capitulation again. With the fear that a remake of the dot-com bubble 2.0 will be launched with great speed?
Do you want to invest in the cryptocurrency sector? Coin trading and its 100% automated algorithmic trading tool allows you to do it in the best possible conditions. This should make your investment profitable and increase your chances of success, regardless of the market trend.
Trading cryptocurrencies carries a high level of risk and may not be suitable for everyone. It is recommended that you fully inform yourself of the risks involved and only invest amounts that you can afford to lose.
The content offered on the CryptoActu.com website is for educational and informational purposes only. They are in no way a recommendation and should not be considered as an invitation to trade in financial instruments.
CryptoActu.com does not guarantee the results or effectiveness of the presented financial instruments. Therefore, we disclaim any liability for the use of this information and the possible consequences.