Is the prince of cryptos catching his breath to better move forward? – Despite a flat weekend, Ethereum (ETH) had its best week since failing below the $3400 resistance at the end of March. Should we rejoice? Yes, in the sense that the bear run since its last ATH in November 2021 marks a logical pause. No, because the technical rebound is currently based on catalysts that are unable to eradicate the current uncertainties in the financial markets.
Incidentally, ETH prices are pulling back under major resistance at the time of writing. But this comes after a significant rise from the $1000 support. Should we see it as an intermediate step in the pursuit of a technical rebound? This is what we will be looking for by analyzing the weekly and daily charts with the welcome help of the Ichimoku indicator.
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Ethereum in weekly units – The pending $1700?
To confirm the end of the last downward wave from the resistance at $3400, the Ethereum chained a third consecutive week on the rise. Especially since it has just successively crossed the resistance of $1400 and the weekly Tenkan. Nevertheless, the bearish candle at the beginning of the week could taint the good momentum since mid-June.
And whether there is a timeout or not from the technical rebound, the price positioning of the prince of cryptos and the Chikou compared to the Kumo (Ichimoku cloud) would remain similar since the week of May 9. This would show that investors should put the idea of a bull run in the drawers until further notice.
Moreover, this small consolidation is not the result of chance. In effect, it occurred near the resistance at $1700. At the same time, the Chikou Span is turning back under one of the major levels of the last bull run. In any case, the new attempt above the resistance of $ 1700 might be long overdue. And for the sake that ETH does not return to its faults from its murderous spring, prices should not slip below the support of $1200 in daily units.
Ethereum in daily units – A triple bottom throwback in sight?
Monday’s bearish candle unfortunately erased the performance of previous candles since July 19th. Thereby, Ethereum prices retreated below the $1700 resistance. With the fear that they push the Tenkan and why not the support of $1400. Nevertheless, let’s not forget that a triple bottom has been validated upstream. Sellers can’t ignore it, at least in the short term.
Which would possibly maintain the chances of prolonging the technical rebound of the prince of cryptos. Not only, a throwback on the neck line or the resistance of the triple bottom around $1200 would be possible in order to solidify the bullish chart pattern. But even better, prices would hold within the Kumo, not far from the Senkou Span A (SSA). By joining these two potential technical signals, the slight pullback would be part of a process to better attack the resistance of $1700.
In the event of a crossing of the latter, this would drive ETH prices towards the $2300 resistance, which itself is close to the descending line. As for the Chikou Span, it would simultaneously return inside the Kumo. And despite a dramatic jump that could rise 130% from the $1000 support, I’m afraid that wouldn’t be enough to suggest a favorable trend reversal.
Although the Ethereum bear run continues to get bogged down, it is still beginning its second technical rebound after the one that lasted from January until the end of March. With the idea that the general panic phase is largely consumed. This would favor in the short term a return of the prince of cryptos towards the next resistance of $1700 at first, then that of $2300.
Many investors would dream of ETH price crossing beyond the descending line since its last ATH in November 2021. But if I were you in front of my screens, I would think long and hard before to conclude a new bull run.
On the one hand, the development of future Kumo in weekly units does not encourage optimism throughout 2022. And on the other hand, if the crossing of the descending line were to occur in the coming weeks , it would materialize when prices still remain below the Kumo. Especially since it is a classic false signal to buy.
This is why the Ethereum bear run may be far from over. The technical rebound simply risks delaying the capitulation. This phase, feared by investors, could take place when the FED accelerates the reduction of its asset balance sheet from September. Not to mention that rate hikes are already weighing heavily on the most volatile asset classes, especially cryptocurrencies.
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