Can Ethereum [ETH] unlock its buying potential after hitting this support level

ETH

Ethereum (ETH) left its short-term investors fairly dissatisfied after failing to uphold the marks of its Point of Control (POC, red) at $3,000. The ripples of the broader selling sentiment pulled the alt to its $2,700 baseline.

With a price retest of its 15-month trendline support, ETH would likely see itself sailing towards the $2,900 mark ahead of any trend-altering moves. At press time, ETH was trading at $2,763.9, down 2.2% in the past 24 hours.

ETH Daily Chart

The evening star candlestick setup bogged down ETH’s revival towards its early April highs. Due to this, the alt remained restricted below the $3,500 level.

Now, ETH has attempted to break the streak of red candles formed over the past two days as selling pressure waned towards its immediate trendline support (yellow, dotted). Historically, buyers have defended this uptrend line support for over 15 months.

The current falling wedge (white) devaluation has spiraled the selling edge while the EMA ribbons take on a bearish flip on the daily timeframe. With the rising gap between moving average lines, the bears displayed their increasing dominance in the near term. Also, considering the sturdiness of the 200 EMA resistance (green), the sellers refrained from giving up their control over the long-term trend. 

The confluence between the horizontal support and the trendline support could propel a short-term rally towards the upper trendline of the wedge. A patterned breakout could position ETH to retest its POC and muster the push to reverse its EMA ribbons.

Rationale

By and large, the RSI resonated with the price movements while marking a falling wedge setup on its oscillator. To reclaim their lost advantage, the buyers needed to break the bonds of the current wedge and look for a poke of its mid-line.

The OBV agreed with a narrative of short-term buying stimulus after marking a bullish divergence with the price last week.

Conclusion

In the light of ETH’s historical biases to bounce back from its trendline support coupled with the bullish divergence with OBV, the altcoin could see a short-term revival on its charts. From a longer perspective, the $2,900-zone could pose hindrances in a potential break-out rally. 

Finally, investors/traders should pay attention to the movement of Bitcoin. Especially since ETH shares an 87% 30-day correlation with the king coin.

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