Technical Analysis
Ethereum’s price has surpassed $2,000 once again, sparking optimism among investors who are hopeful for a new bull market and a potential new all-time high for ETH in the coming months. However, it’s important to exercise caution after significant price movements.
The Daily Chart
On the daily timeframe, the price surged after finding support at the 200-day moving average around $1,800. The market has broken above a large descending channel, signaling a new bullish wave on the horizon. Nevertheless, a short-term consolidation or correction is likely at the moment.
The price has reached the $2,200 resistance level, and the Relative Strength Index is showing an overbought signal. As a result, a pullback to $2,000 is highly probable, with a deeper drop toward the higher trendline of the broken channel also possible.
The 4-Hour Chart
The 4-hour chart shows a classic bullish continuation pattern. The price first rebounded from $1,550 in October and then went through a few weeks of accumulation phase below $2,000. Finally, yesterday’s price rally was a result of this accumulation phase, and the price is currently testing the $2,150 resistance zone.
Similar to the daily timeframe, the Relative Strength Index indicates an overbought state in momentum. Therefore, a drop back toward $2,000 or even the mid-line of the accumulation range at $1,850 can be expected in the short term before a further move higher.
Sentiment Analysis
Funding Rates
Ethereum’s price surged more than 10% yesterday but the derivatives market is demonstrating a concerning signal that market participants should consider carefully before taking any action.
The funding rates for Ethereum have spiked considerably following yesterday’s price surge, reaching levels last seen during the final phases of the 2021 bull market. Therefore, a correction or even a total reversal might be on the horizon as a result of potential long liquidation cascade.
Hot Take: Is Ethereum Headed for New Heights?
While Ethereum’s recent surge has sparked optimism for investors hoping for a new bull market and potential all-time highs in the coming months, caution is advised due to overbought signals on both daily and 4-hour charts. Additionally, concerning funding rates in the derivatives market suggest that a correction or reversal may be on the horizon. Keep an eye on key support levels and be prepared for short-term consolidation or corrections as Ethereum’s price continues its upward trajectory.
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