As a seasoned analyst with over two decades of trading under my belt, I find myself closely monitoring the recent surge of Ethereum towards the formidable $4K resistance region. Having weathered numerous market cycles and bull runs, I’ve learned to read between the lines of price action and market sentiment.
It appears that Ethereum is showing significant positive movement, recently experiencing a boost that’s taking its cost near the important $4,000 barrier for potential breakthrough.
Approaching a significant resistance level, I foresee the possibility of continued growth, yet I must caution that brief periods of consolidation may occur owing to the current overbought state of the market.
Technical Analysis
By Shayan
The Daily Chart
Following a successful breakthrough at the $3,500 resistance point, Ethereum has persisted with its upward momentum, advancing towards the noteworthy $4,000 resistance zone. This price bracket corresponds to ETH‘s annual peak and holds significance because it has historically served as a robust barrier during past efforts. Given the presence of potential heavy selling pressure within this range, there’s a possibility that it could hinder the asset from making significant gains in the near future.
As a researcher observing the market trends, I find that if we surpass the current level, it signals the persistence of the bullish trend and could potentially reach new record highs. Given the market’s overextended state and the powerful impulsive move, I foresee a period of consolidation around $3.5K-$4K before any additional upward momentum. The RSI indicator aligns with this prediction, as it suggests that the overbought conditions might lead to a consolidation or corrective phase imminently.
The 4-Hour Chart
On the 4-hour timeframe, Ethereum’s price continues to form new highs and lows that are higher than previous ones, reinforcing its overall bullish trend. Yet, the Relative Strength Index (RSI) suggests a bearish divergence, indicating a weakening of the upward momentum. This might result in a temporary correction or stagnation, particularly around the $4K resistance level.
As Ethereum tests the $4K resistance, the possibility of a temporary rejection becomes high. A retest of the $3.5K support level, where buying pressure has been strong in the past, is likely. If ETH finds support at this level, it could lead to another attempt at breaking the $4K resistance.
Onchain Analysis
By Shayan
Studying the statistics of Ethereum’s futures market gives us a helpful perspective, enhancing our understanding of market trends along with price assessment. A crucial statistic to consider is the Taker Buy Sell Ratio, as it showcases the level of assertiveness between buyers and sellers in completing their trades.
According to the graph, when Ethereum’s price nears the substantial $4K barrier, there’s a significant rise in market sell orders. This spike in sell orders has pushed the Buy-Sell Ratio (Taker) to its lowest level in quite some time.
This shift suggests that future market participants may lock in profits or prepare for a potential price correction. The drop in the Taker Buy Sell Ratio implies a possible slowdown in upward price movement as more market participants take a risk-off approach. This aligns with anticipating a price pullback or a correction phase, making it crucial for traders to monitor the futures market for further developments.
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2024-12-06 18:30