Ethereum Faces Resistance Despite Signs of Recovery
ETH seems poised to recover promptly as several metrics suggest that bullish momentum is building up.
- Ethereum is down nearly 34% in the last 72 hours.
- Despite those losses, a bullish impulse seems to be underway.
- Slicing through $1,620 could lead to a 15% upswing.
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Ethereum looks primed to rebound while other cryptocurrencies continue to bleed after the recent crash.
Whales Make Money Moves
Ethereum saw its price drop by nearly 34% over the past three days. The sudden bearish impulse appeared after Ethereum reached a new all-time high of over $2,040. Due to the hype around such a significant milestone, many overleveraged traders were wiped out of their positions as the price of ETH crashed to $1,350.
Santiment’s Token Age Consumed index registered a substantial spike in idle ETH tokens exchanging hands after prices dropped. Such behavior can signal changes in long-term holders’ perception of the market, and it tends to be preceded by increased volatility.
Ethereum Flashes Buy Signal
The Tom Demark (TD) Sequential indicator presented a buy signal on ETH’s 4-hour chart. The bullish formation developed as a red nine candlestick as Ethereum retested the 2018 all-time high of $1,420.
A spike in volatility around the current price levels, as predicted by the Token Age Consumed metric, could help validate the TD setup’s outlook and lead to a one to four 4-hour candlestick upswing.
Ethereum must slice decisively through the 200 four-hour moving average at $1,620 to confirm the optimistic thesis. If this were to happen, Ether’s market value might surge by 15% towards the 100 or 50 four-hour moving average.
These resistance levels sit at $1,800 and $1,850, respectively.
It is worth noting that as long as the $1,420 support holds, the odds for a rebound will remain high.
Breaking through this crucial price hurdle could be devastating for the Ethereum bulls. A downswing below $1,420 might cause panic selling among investors leading to another leg down to $1,100.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
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