Key Points
- Ethereum’s price fell by over 7% in the past week, but market indicators suggest a possible trend reversal.
- A bullish pattern has emerged on Ethereum’s daily chart, suggesting potential for a price rally.
Ethereum experienced a significant price drop of more than 7% in the past week. However, market indicators hint at a potential trend reversal in the near future.
Ethereum’s Potential Bullish Trend
At the end of May, Ethereum was performing well with a large green candlestick on its daily chart. However, the week that followed saw a substantial drop in the token’s value. Despite this, Ethereum’s declining price trend may soon change, opening up the possibility for Ethereum to retest its March highs.
According to CoinMarketCap, Ethereum’s price fell by over 7% in the past seven days. At the time of writing, Ethereum was trading at $3,516.89 with a market capitalization of over $422 billion. Despite this decline, a bullish pattern has emerged on Ethereum’s daily chart, suggesting the potential for a price rally.
Ethereum entered this pattern after reaching its May high, and at present, the token’s price is testing the support near the lower limit of the bullish flag pattern. If this test is successful, it could trigger a bull rally, potentially leading Ethereum to retest its March highs of $4k in the coming weeks.
Will Ethereum Test the Bullish Pattern?
In order for Ethereum to test the bullish flag pattern, it is crucial for the token to register a few green candlesticks in the coming days. Analysis of CryptoQuant’s data suggests that this might be possible, as Ethereum’s exchange reserve has been dropping, indicating high buying pressure on the token. Additionally, the total number of coins transferred has increased by 13.93% over the last 24 hours, which could be interpreted as a bullish signal.
Things in the derivatives market also look optimistic, with Ethereum’s funding rate on the rise. This suggests that long-position traders are dominant and are willing to pay short-position traders. Furthermore, data from Glassnode shows that Ethereum’s NVT ratio dropped last week, which typically indicates that an asset is undervalued and may result in price upticks.
Ethereum’s price has touched the lower limit of the Bollinger Bands, hinting at a potential rebound. Its Relative Strength Index (RSI) has also registered an uptick and is headed towards the neutral mark. However, the MACD shows a bearish advantage in the market, which could pose a challenge for Ethereum’s recovery.
Support and resistance levels were identified by examining Ethereum’s liquidation heatmap. If Ethereum turns bullish in the coming days, it could reach $3,675. However, if it fails to test the bullish flag pattern, the token might drop to $3,500 in the short term.
