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ETH Pumps 3% Daily but Is $2K Back in the Cards? (Ethereum Price Analysis)

Crypto News - CryptoVizArt 2023-05-29 23:30

Ethereum has recently flashed a bullish signal by finding support at the 100-day moving average of $1791 and experienced a spike in its price. Also, it has now encountered a crucial resistance level, and surpassing it would likely trigger another surge.

Technical Analysis

By Shayan

The Daily Chart

Ethereum had a period of steady price action around the 100-day moving average of $1790 before finding support and proceeding upward.

However, during the recent consolidation correction phase since mid-April, the price formed a descending wedge pattern (marked by yellow).

Presently, the price has reached the upper boundary of the wedge at $1.9K due to its recent surge and is on the verge of surpassing this critical level.

Ethereum’s price is currently confined within a narrow range, between approximately $1791 and the static resistance zone of $2K. A breakout from the wedge is likely to trigger another rally toward the $2K resistance zone.

eth_price_chart_2905231 Source: TradingView

The 4-Hour Chart

Zooming in on the 4-hour chart, we can identify three crucial price regions: the static resistance at $2K, the dynamic resistance of the ascending channel’s trend-line midpoint, and the static support at $1710.

Based on the current price action, the price seems more likely to continue its upward trend toward the $2K resistance and attempt to break out. However, considering the current market conditions and the prevailing uncertainty among participants, it is also likely that a consolidation phase between the $2K resistance and the $1710 support regions will take place.

eth_price_chart_2905232 Source: TradingView

On-chain Analysis

Price fluctuations in the market result from the dynamic interplay between supply and demand forces. Demand plays a crucial role among these forces, and closely monitoring market participants’ behavior is critical to assessing the existing demand.

One effective way to gain insights is by analyzing the Active Addresses metric. It measures the total number of unique active addresses, including both senders and receivers. During the recent consolidation phase, it has fallen into a downtrend, indicating a decrease in demand and a period of uncertainty among market participants.

Furthermore, the metric has recently hit its lowest point of the year, suggesting that the current level of demand is insufficient to signal the beginning of the next bull run. As a result, the market needs increased activity to kickstart a healthy bullish cycle. This could potentially be achieved if the price successfully breaks through the significant resistance region at $2K.

eth_active_addresses_chart_2905231 Source: CryptoQuant

The post ETH Pumps 3% Daily but Is $2K Back in the Cards? (Ethereum Price Analysis) appeared first on CryptoPotato.