Ethereum price shows an interesting development over the course of last week. Despite crashing down, ETH seems to be in a position to show positive returns this week that could push it higher to significant levels.
Ethereum price recovery underway
Ethereum price crashed 23% in the past month and hit a low of around $2,714. This move formed the second swing high and the third swing low. This decline was crucial in establishing an ascending parallel channel.
However, drawing a trend line joining the two higher highs and three higher lows shows ascending parallel channel formation. The last two times Ethereum price tagged the lower trend line of the channel, it was followed by a 43% run-up.
Therefore, investors may become cautiously optimistic about the current position and start accumulating ETH in hopes of a move higher. The parallel channel is the first and most important reason why Ethereum price is likely to reverse and reverse losses.
The second reason is the bullish divergence formed between the price’s higher lows and the Relative Strength Index’s lower lows. This setup forecasts a bullish move for ETH and is likely going to propel ETH higher.
Additionally, using the Fibonacci tool for the 43% rise from January 22 to February 10 reveals that the upcoming move saturates at a 27% retracement level at $3,554. Using the same logic and applying the Fibonacci tool for the second rise between March 7 and April 3 reveals that the target could be $3,856.
Since all of the outlooks are suggesting a bullish outcome, there is a good chance ETH could actually tag the $3,856 target and make its way to the $4,000 psychological level.
This outlook for Ethereum price is supported by the declining supply of ETH on exchanges over the past month. The number of ETH tokens held on these platforms fell from 15.24 million to 14.86 in just 30 days, indicating that investors are withdrawing their holdings from exchanges due to their confidence in the performance of the Ethereum price.
This indicator coincides with the forecasts from a technical outlook perspective, which adds a tailwind for bulls. Therefore, investors need to be prepared for the next leg-up of Ethereum price.
