After a sharp 20% Ethereum price recovery, ETH price action has established a firm base of support at the $2,200 level. This rally comes after a period of consolidation and breakout above the $30 as a major resistance level. Bullish technical indicators point to continued bullish momentum, which could set the stage for even more gains in the short term. For good reason — investors and analysts are keeping a close eye on Ethereum’s performance as it rides this bullish wind.
Ethereum’s price had been trading sideways for over two weeks, holding between a clearly established range between $1,700 and $1,861. During this time of equilibrium, buyers and sellers reached a comfortable middle ground. Neither side was really able to achieve a decisive victory. Yet, this balance was only temporary as buyers soon found themselves in the driver’s seat.
Ethereum also managed to break past the top boundary of its consolidation area, around $1,861. Needless to say, this breakout sparked a swarm of buying activity, sending the price up over 20% in the process. That surge was a testament to growing faith in Ethereum’s long-term promise, and it pulled in speculative short-term traders alongside whale long-term investors.
Technical Indicators Signal Bullish Momentum
Moving Average Convergence Divergence (MACD) indicator on Ethereum’s daily chart was one such indicator that gave a bullish signal ahead of the breakout. On Thursday, the MACD showed a bullish crossover, with the MACD line crossing above the signal line. In technical analysis, this crossover is almost always viewed as a buy signal, meaning the upward momentum should continue.
The MACD, or moving average convergence divergence, is a momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD line itself is created by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The signal line is a 9-day EMA of the MACD line.
When the MACD line crosses above the signal line, this indicates that the shorter-term moving average is increasing at a faster rate. Such a movement would indicate a very bullish breakout market. On the other hand, when the MACD line crosses below the signal line, it is a signal of a downtrend. The recent bullish crossover on Ethereum’s daily chart looks promising indicating the cryptocurrency is set for even more gains.
Current Price Action and Market Sentiment
Ethereum continues around the $2.32 price level as of this Friday. It proves its strength by being able to slug just enough to cling on to the gains achieved from this latest bullish crescendo. Part of that stability is an encouraging sign that purchasing demand is relatively intact. More importantly, investors are happily holding on to their investments, expecting even more price appreciation.
It should be noted that the cryptocurrency market is by nature a very volatile market, and price changes can happen in as little as a few hours. It’s important that traders and investors remain cautious and do their own research when considering investment, including fully understanding any associated risks.
The overall state of Ethereum’s current price action exudes palpable exuberance in the Ethereum market. This optimism is bolstered by a recent breakout and positive signs from technical indicators. If the cryptocurrency continues to move above $2,200, it should become more bullish. This massive backing can continue pushing its bull run.
Potential Future Price Movements
Looking forward, the price of Ethereum might aim for upper resistance levels of $2,400 or perhaps even $2,500. Reaching these ambitious targets will depend on a few key factors. Main factors include general market sentiment, the behavior of other cryptocurrencies, and any major developments or news related to the Ethereum network.
A failure to hold above the $2,200 level could lead to a pullback towards lower support levels, such as $2,100 or even $2,000. In this case, the bullish momentum will dissipate. The cryptocurrency could face a period of consolidation or correction.
