After strong bounce from support, Ethereum has a lot of resistance ahead
Previously on U.Today, we covered Ethereum’s move in the market as the second-largest cryptocurrency hit the fundamental support line, which has served as the basis for rallies on Ether since the summer of 2021. Fortunately, the support line worked in favor of the bulls once again.
According to the daily chart of the asset, ETH has successfully bounced off the aforementioned support line and is currently moving towards the next major resistance, which would be $2,000 as it acts as a psychological threshold for traders and investors.
In addition to the “round numbers” resistance, it is highly likely that traders who entered Ether at around $2,000 would try to break even on their positions, selling near or directly to the price. Such a trend creates massive pressure on the rising asset and can interfere with its trajectory to a new local high.
Foremost, Ethereum has to breakthrough the downtrend formed since May 15 before entering another rally. According to volume profiles, traders and investors are not rushing to support the current movement on the second biggest cryptocurrency on the market.
The technical indicators do not seem to show any type of market signal as the volatility on Ethereum and other cryptocurrencies remains relatively low.
The only distinguishing signal we can clearly see right now is the strong divergence on the Relative Strength Index. Usually, divergences are heralds of an upcoming reversal or a bottom. In the case of Ethereum, we are already seeing a realization of the signal.
At press time, Ether is trading at $1,875 and losing some of the growth it has had since the start of the week. The cryptocurrency has yet to break the upcoming trendline support to go further.
