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In this scenario, the most likely outcome of a consolidation period is not a move higher, but actually the opposite.
Even though the RSI has hit oversold levels, in the broad context of the price action, this could be a temporary pause for the market to resume its downtrend.
Consolidation periods occur as market participants digest the latest developments and assess the state of the market before deciding what the trajectory of the price should be next.
Looking at ETH’s yearly volumes, the second-highest point of control (POC), which is the area with the most volume traded, stands at the $1,900 level.
The price could recover to this level in the next few weeks as traders retest the market’s interest for ETH near a control area.
If the price fails to move above this area, it is highly likely that it can drop to lower lows, meaning that the odds of seeing ETH hitting the $1,000 this year are still quite high.
In contrast, if bulls manage to push the price above the $2,000 level, it would mean that ETH has a good chance to rise to the current POC – which stands at $2,700.
Macroeconomic conditions and market sentiment favor a bearish outlook at this point but selling volumes at $1,300 were fairly low, meaning that ETH could have hit a local bottom.
However, as history suggests, the token could trade range-bound between $1,300 and $1,700 for a few months before making its next big move.
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