Technical Analysis – Ethereum hovers in the 2,650 area
- Cryptos benefit from the improved risk sentiment
- Ethereum is trading above the 50-day SMA
- Momentum indicators remain bullish
Ethereum is recording a green session today, recovering its mid-week weakness and testing the resistance set by the 2,667 level. The improved risk sentiment in equity markets has boosted demand for cryptocurrencies, helping ethereum to quickly bounce back from its early September trough and to climb above its 50-day simple moving average (SMA).
In the meantime, the momentum indicators remain mostly bullish. The RSI is edging higher, but a possible failure to record a new higher high could mean that the current upleg is losing its strength. Interestingly, the stochastic oscillator is hovering inside its overbought territory (OB), battling with its moving average. It can stay in the OB region for a while before signaling the potential completion of the current rally.
Should the bulls remain confident, they would try to lead Ethereum above the 2,667 level and try their luck and resolve against the 61.8% Fibonacci retracement level of the October 13, 2023 – March 12, 2024 uptrend at 2,811. Even higher, the May 27, 2024 trendline might prove a stronger obstacle for the bulls than currently anticipated.
On the other hand, the bears are attempting to retake market control and keep ethereum below the 2,667 level. They could then try to push it below both the 50-day SMA and 61.8% Fibonacci retracement at 2,527 and 2,507 respectively. If successful, the path then looks clear until the recent trough at 2,149, where the bears could have the change to record a new 2024 low.
To conclude, ethereum is benefiting from the improved risk appetite but some key resistance areas have to be broken for the prevailing bearish trend to be reversed.
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