Ethereum Price Trend Continuation Depends On Critical Support Levels
As the window for spot Bitcoin ETF approval shrinks to 36 hours, you can see that market participants have different strategies. Bulls are hoping for a breakout in Bitcoin and Ethereum price, while bears are anticipating a correction triggered by the “sell-the-news” narrative, which could potentially lead to a longer-term upward trend.
Although Ethereum price has been buoyant, it has stalled near the stubborn $2,400 resistance. Since early December, Ethereum has consolidated within a narrow range, with resistance at $2,400 and support around $2,200.
This consolidation has led to Ethereum forming a bullish rectangle pattern. If this pattern is validated, investors may see a 10% move. The next sessions will determine the next direction for Ether.
If the immediate support at $2,274 by the 20-day Exponential Moving Average (EMA) remains intact, the path of least resistance will shift upwards. This would pave the way for Ethereum price to activate the rectangle breakout and target highs at $2,600. Keep an eye out for a daily candle close above this support line as it would reinforce the presence of bulls in the market.
Long-term success in a news-sensitive market necessitates a measured approach
While experienced investors navigate this volatility with caution, novice traders might find it challenging. The Moving Average Convergence Divergence (MACD) indicator currently shows a sell signal but has the potential to send a buy call for ETH in the near term.
Before entering new long orders, make sure that the MACD line in blue is above the signal line in red and accompanied by an upward-sloping movement.
Prudence remains paramount amidst bullish murmurs. If Ethereum price continues to lack directional momentum and breaches the 20-day EMA support, it would confirm the prevailing bearish sentiment. This, coupled with the potential market response to the approval of spot Bitcoin ETFs, could intensify downward pressure on Ethereum, potentially pushing it towards the $2,200 rectangle support level.
Collecting liquidity from this support could give Ethereum price the momentum to make another attempt at a breakout to $2,600. However, if the support weakens and panic-selling pressure increases, ETH may be forced to retest $2,200 and potentially brush the 200-day EMA support before the next significant trend reversal begins to build.
The token is also approaching the 2022 low on the ETH/BTC pair, which crypto analyst Michaël van de Poppe believes holds immense liquidity to support the next breakout above $3,000.
#Ethereum approaches the low of 2022 and is likely going to take the liquidity there.
If an ETF approval for #Bitcoin happens, I think we’ll have a liquidation candle on ETH/BTC and after that a rotation into Ethereum, combined with a bullish weekly divergence. pic.twitter.com/kGq91S7kq9
— Michaël van de Poppe (@CryptoMichNL) January 9, 2024
The anticipation for the ETF will greatly impact the performance of Ethereum price. While a sell-the-news scenario is possible, investors cannot ignore the spike in capital flow that is likely to give cryptocurrencies like ETH and BTC momentum to reach higher highs.
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Hot Take: Ethereum Price Trend Hinges on ETF Approval and Support Levels
With the window for spot Bitcoin ETF approval narrowing, the crypto market is divided between those who anticipate a breakout and those who expect a correction triggered by the “sell-the-news” narrative. Ethereum price consolidation near $2,400 resistance has formed a bullish rectangle pattern, with support at $2,200. The next sessions will determine whether Ether breaks out towards $2,600 or experiences downward pressure. Traders should closely monitor the Moving Average Convergence Divergence (MACD) indicator and ensure prudent decision-making amid volatility. The approval of spot Bitcoin ETFs could intensify downward pressure on Ethereum, but liquidity from support levels may help sustain upward momentum. Overall, the performance of Ethereum price will be influenced by ETF approval and investor capital flow.
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