Already the end of the lull?- Within a few weeks, Ethereum managed to bounce off the support at $1,000 and continues its rise ahead of The Merge event. In a complicated macroeconomic context, the markets are rising again and cryptocurrencies are following. Could the rise continue in the coming weeks or is it a false bounce in a downtrend? Let’s look at this through technical analysis and on-chain analysis.
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Ethereum weekly: hard zone approaching
Certainly The Merge is approaching, but for now, Ethereum is still below the resistance located at $1,900. It will have to be exceeded if we want to see Ethereum perform again:
Since the break of $2,200then $1,900Ethereum has started a bearish momentum and went to join the next strong support at $1,000. At the support level $1,000, Ethereum has changed dynamics, but it is not yet won. Indeed, the hard zone is still present and will be difficult to cross. Now the area to $1,900 resists and the price will remain generally bearish as long as it holds.
If Ethereum is bearish, this area will hold and repel price action. The danger would then be to make a new low in the market, below the $1,000. On the other hand, a break in the resistance at $1,900 would be a very good sign for Ethereum and cryptocurrencies in general.
The momentum of this asset is always Februarye, because located below the downtrendline. As long as this is the case, there is not much to expect from Ethereum. Retracements (bullish) could only be short-lived…
Daily: Ethereum stalls at $1,700, back to $1,250?
On a weekly basis, the level at $1,900 is particularly interesting. On a daily basis, Ethereum blocks on an important intermediate level:
We can clearly see this on a daily basis, the level at $1,700 is strong resistance for the course of ETH. For the moment, the course is done dismiss. In the event of a stronger rejection, the price could return to the level of the bracket at $1,250. This support corresponds to the neck line of the “W”, structure of trend reversal.
The momentum is always bullish, no worries for the moment for the RSI. The stochastic is in overbought zone. This does not mean that the price will necessarily fall, the stochastic can remain in the overbought zone for a long time. As long as the stochastic is in the overbought zone, the momentum is powerful. If he leaves this zone to join the neutral zone, we could then think of a return to $1,250.
Bitcoin on the verge of regaining control against Ethereum
For a few weeks, Ethereum has outperformed Bitcoin. The ETH/BTC price arrives at an area of resistance :
Ethereum reacted in extremis at the bottom of the range. It was a bear trapbecause the price has reintegrated the tidy. The course now reaches the level of the resistance and tries to break the bearish trendline. For Ethereum to outperform Bitcoin in the same way as in 2020 and early 2021, it will be necessary to break out of this range.
For the moment, we can think that the price is about to to block. Also, the momentum is always bearish and against the bearish trendline. If it gives way, the buyers could manage to make the sellers bend and continue a new bull cycle against Bitcoin.
In this unit of time, we see globally the same things as in 2W. The course is in a tidy and battle at the bearish trendline. On the other hand, it is interesting to note that the RSI gave a signal bullish breaking the bearish trendline. This was put in place in May 2021 and it seems to have ended a few days ago. If the breakout is confirmed, it could be interesting in view of The Merge…
Ethereum on-chain analysis
On-chain analysis helps to better understand the behaviours market players. These are analyzes that are interesting in the medium or long term. Among the indicators of interest are the deposits and withdrawals at the exchange level as well as whale behavior. Let’s take a look at this data.
Analysis of Ethereum deposits and withdrawals on exchanges
In June, players were massively depositing Ethereum on exchanges. It looks like capitulation from the actors. Since at the end of July, withdrawals are back and perhaps sign the end of the capitulation? Nothing certain however, these are simple observations from these data.
It can be noted that the 2020-2022 period was marked by many withdrawals. If the bearmarket is just beginning, we should find periods with heavy deposits on the platforms as was the case in 2018.
Analysis of the behavior of large portfolios
The whales are entities with more than 1,000 BTC. When talking about Ethereum, it is particularly interesting to look at players with more 10,000 ETH in portfolio:
These entities had distributed the top from August 2021. By mid-March 2022, the number of addresses with more than 10,000 ETH had risen sharply, but the price had fallen. Since then, these players are probably selling at a loss, in any case, they don’t seem to be interested in the current prices.
Ethereum hits a hard zone and starts locking at $1,700. After a 100% rally from the low found at $880, it would not be illogical to see Ethereum regain some strength. As long as Ethereum is below the important resistance at $1,900, this bounce is just a false bounce. Ethereum is strong against Bitcoin, but the price is hitting a crucial resistance. A few weeks before the long-awaited event “The Merge”, Ethereum must break this resistance against Bitcoin. On-chain analysis shows that after a period of panic with heavy deposits on exchanges, players are starting to withdraw ETH from exchanges again. Was it the final capitulation or the beginning of a change in the behavior of the actors? the macroeconomic context remains obscure and it does not help to imagine a strong increase for the end of the year despite the arrival of The Merge.
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