Ethereum is still seeing an amazing rise, and it makes perfect reason to wonder how long this exuberant rally will go. The mood is upbeat as the cryptocurrency has been effortlessly breaking through resistance levels lately. But things may change rapidly, and the opposite might be about to happen.
The latest price movement of Ethereum shows strong bullish momentum. The price has been rising rapidly, surpassing the psychological $3,000 barrier and not exhibiting any imminent indications of abating. There is a clear upswing because the moving averages are positioned significantly below the current price. But the Relative Strength Index (RSI) is approaching overbought area, which historically indicates that a possible decline in price may be approaching.
The 50-day moving average, which serves as a dynamic support, is located near the $3,200 mark for ETH, providing short-term support. The level $2,900, which served as resistance in the past and may now act as a cushion for any possible pullback, is the next key support.
Notwithstanding the robust upward trajectory, it is impossible to overlook the present market exuberance, which sometimes heralds a severe drop. If fundamentals fail to curb the market’s exuberance, an overabundance of long holdings may result. If there’s a catalyst for a sell-off, a series of protracted liquidations can intensify the downturn and drive prices down in a chain reaction.
In a positive scenario, Ethereum would keep gaining ground and would even stabilise over $3,400 before rising once again. On the other hand, the unavoidably pessimistic scenario advises traders to prepare for a possible retreat. Although exhilarating, the present market frenzy may catch investors off guard and cause the bullish parade to come to an abrupt halt.
