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However, the price had not made a lower low as it has now and this is a reason to be concerned about what could come next for ETH.
The past two times that ETH rose to all-time highs, it took the price 6 months or less to get there after it stepped off oversold territory in the Relative Strength Index (RSI).
As a result of this month’s strong uptick, ETH has now stepped outside oversold as well. Note that the uptrend started after the price climbed above the 21-day EMA. Sure, there were multiple failed breakouts along the way, but they showed that bullish momentum was picking up its pace.
As of today, ETH has not managed to break above its 21-day EMA. Hence, there has been no buy signal yet.
If that bullish breakout occurs, the price could rally to $1,900 first. This is an important area of resistance as this year’s volume profile shows that it was the one with the second highest trading volumes.
If ETH does climb and breaks above that level, this could lead to a strong uptrend as levels above that mark have lower volumes, meaning that bulls will encounter less resistance to push the price higher.
Momentum indicators are favoring a bullish short-term outlook for now but the 21-day EMA is the most critical indicator to watch to determine if the trend is changing.
Meanwhile, a break below the token’s most recent low at $1,375 could plunge ETH to $1,155 and invalidate this scenario.
For now, momentum is on the side of bulls but market conditions are challenging and the macro backdrop is still quite unfavorable so it would be no surprise that ETH drops to lower levels this year if the U.S. economy deteriorates, inflation moves higher, or the Fed decides not to lower rates at all this year.
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