June 12, 2021
  • June 12, 2021

Ethereum Price Analysis: ETH’s Upward Momentum Pauses, But Bulls Aim Higher

By on May 29, 2021 0
  • Ethereum price is stagnating at the tactically important 50-day simple moving average (SMA), but the overall price structure remains constructive.
  • ETH consolidation is all about releasing the price compression generated by the strong rebound from the May 23 lows.
  • A lower price breakout will uncover overwhelming support at the February 20 high at $ 2,042.

Ethereum’s price did not regain the relative strength that dominated the April-May period, but the response to the largest weekly loss of 41.44% was constructive. Until ETH can achieve lasting price pull above the 50-day SMA, the Ethereum price will be clouded by investor skepticism.

Ethereum price struggles to separate itself from broader crypto weakness

The price of Ethereum rose just over 50% from the May 19 low of $ 1,900 before printing a new corrective low on May 23. The new low was followed by a 70% rebound to the May 26 high. A bullish hammer candlestick on the 12-hour ETH chart initiated the rebound on May 23, and it was accompanied by above-average volume after hitting an oversold reading on the Relative Strength Index (RSI) daily. Additionally, the May 23 undercut from the May 19 low set the Ethereum price in place for a double bottom pattern with a trigger price of $ 3,000.

The back-to-back rapid rebounds thwarted any bearish narrative and created a price squeeze that must be released by removing weak ETH holders through withdrawals like today. Once completed, the Ethereum price will be free to test the double bottom trigger price.

A break above the double bottom will quickly uncover resistance at the 61.8% Fibonacci retracement of May’s decline to $ 3,369. If the rally continues, Ethereum price will experience minor resistance at the 78.6% retracement at $ 3,815 before launching an assault on the all-time high at $ 4,384.

ETH / USD daily chart

Aggressive sales renewal in the cryptocurrency complex could derail the relatively positive outlook for Ethereum price. The most crucial support level is the February 20 high at $ 2,042, a price that was resistance and support in April and May on an intraday and close basis.

If the sell does not stop, the May 23 low will offer modest support, but the vital level is the strategically important 200 day SMA at $ 1,638. This should motivate leading investors and institutions to start accumulating size.

Santiment Market Value Metric (MVRV) sends a bullish message for the price of Ethereum. The current measurement is negative despite ETH’s 70% rebound, indicating that the smart contract giant remains undervalued.

ETH MVRV metric

ETH MVRV metric

In April and May, the Ethereum price displayed relative strength as it assumed leadership across the crypto market as a whole. The fundamentals underlying this performance have not changed and ETH is only just starting to attract the interest of institutional investors.