Ethereum Faces Resistance Despite Signs of Recovery

ETH seems poised to recover promptly as several metrics suggest that bullish momentum is building up. 

Shutterstock image by Blue Planet Studio

Key Takeaways

  • 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's Token Age Consumed by Santiment
Ethereum’s Token Age Consumed by Santiment

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.

Ethereum US dollar price chart
ETH/USD on TradingView

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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