Ethereum’s V-Shaped Recovery: Breaking Down the Bull Case

TLDR

Ethereum price recently increased above $2,650
A potential breakout towards $3,000 is being discussed
The price dropped from $3,500 but may be finding a bottom
Exchange reserves show signs of accumulation
Key resistance levels are at $2,700 and $3,000

Ethereum, the second-largest cryptocurrency by market cap, has been experiencing a range of price movements in recent weeks. After reaching highs near $3,500, the price saw a sharp decline. However, recent data suggests a potential recovery may be underway.

The price of Ethereum recently climbed above the $2,650 mark, showing signs of strength against Bitcoin. This increase came after finding support around $2,520.

The upward movement brought Ethereum to a high of $2,732 before a slight pullback occurred.

Currently, Ethereum is trading above $2,670 and the 100-hour Simple Moving Average on short-term charts. A triangle pattern has formed with support at $2,670, indicating a period of consolidation. If the price continues to rise, it may face resistance near $2,720 and $2,750.

Some analysts believe that a break above $2,750 could open the path towards $2,820 and potentially the $3,000 level.

However, the recent price history shows some volatility. After being rejected from the $3,500 level, Ethereum experienced a significant drop.

This decline broke through several key support levels, including $3,200 (the 200-day moving average), $3,000, and $2,700. The price even tested the $2,200 support zone before showing signs of recovery.

The daily chart reveals the extent of this decline, with the price falling below the important 200-day moving average. This move was seen as bearish by many traders.

Yet, recent price action has been more positive, with a strong upward movement occurring in the past day. This has led to speculation about whether a quick, V-shaped recovery might be possible.

On the 4-hour chart, technical indicators such as the Relative Strength Index (RSI) have moved above the 50% level, suggesting bullish momentum in the short term. If Ethereum can break through the $2,700 resistance level, it may continue towards $3,000.

On-chain data provides additional context for these price movements. The Ethereum exchange reserve metric, which measures the amount of ETH held on exchanges, has shown interesting trends.

During the recent price drop, this metric increased, indicating that many investors were sending their Ethereum to exchanges, possibly to sell. However, the metric has started to decrease again, falling below its 30-day moving average. This could suggest that fewer people are looking to sell and more are choosing to hold or buy Ethereum.

If Ethereum fails to break above $2,720, it might face a downward move. Support levels to watch in this case would be $2,670, $2,640, and $2,620. A drop below these could bring the price back to the $2,550 or even $2,520 level.

The post Ethereum’s V-Shaped Recovery: Breaking Down the Bull Case appeared first on Blockonomi.

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