Ethereum price has shattered one-half of a significant support confluence, suggesting that the bears are taking control. However, the said foothold still holds true and hence, the chances of reversal are not extinguished completely.
The Ethereum price will start to rise again
Ethereum price is set in a range of $2,158-$3,282 after a 52% rally between January 24 and February 10. These barriers acted as a boundary that bulls and bears always respect.
The range-bound price action often sees a breach of one of the limits followed by a run toward the opposite limit. For Ethereum price, the range high was swept on 28 March after a 43% upswing from $2,498 to $3,583.
This uptrend was followed by a reversal due to profit taking, resulting in a 22% decline from where ETH is currently trading – $2,856. This correction pierced the 50-day simple moving average (SMA) and the 100-day SMA and the daily demand zone, extending from $2,820 to $2,966. However, the buyers seem to be reacting, which has led to a small rally inside the demand zone, suggesting that this level is not yet invalidated.
Therefore, investors can expect ETH to still trigger an uptrend. If this rally shatters through the 100-day SMA at $3,022, there is a good chance it can make its way to the range high at $3,282. In some cases, Ethereum price might extend to the 200-day SMA at $3,478 where it was rejected the last time around.
This surge, in total, would represent a 21% gain and is likely where a temporary high will be formed for ETH.
Supporting this bullish outlook for Ethereum price is the 30-day Market Value to Realized Value (MVRV) model. As mentioned in previous articles, this indicator is used to assess the average profit/loss of investors that purchased ETH tokens over the past month.
Based on Santiment’s backtests, anything below -10% to -15% indicates that short-term holders are at a loss and that’s usually where long-term holders are accumulating. Therefore, a value below -10% to -15% is often referred to as the “opportunity zone”, because the risk of selling is lower.
For Ethereum, the 30-day MVRV is hovering around -10.2%, which is where ETH formed a local bottom on February 24 and March 7. Both these times, Ethereum price rallied around 30% in under two weeks.
Therefore, if history repeats itself, there is a good chance that the recent downtrend is a “buy bottom” move.
