Ethereum increased by 25% in the past few days and seems to be a step away from shattering the line that has followed the price since its all-time high was registered in November 2021.
The Daily Chart
Ethereum has reached an obstacle on the daily chart. A significant resistance zone has been established by the convergence of two descending lines (in yellow and orange) and the horizontal resistance at $1,800 (in red).
On August 14, the bulls’ final effort to break out was unsuccessful. Since then, the price moved into a weaker position, reaching $1,420. The recent increase has now presented the bulls with an opportunity to retest the resistance zone.
In the days leading up to the Merge, the market is dominated by bullish sentiment, and this will be amplified if the bulls can reclaim $2K. Alternately, failure to break this level will end expectations of a rally. If this occurs, the first area of solid support lies around $1,400.
In conclusion, it is crucial to observe the daily structure during the next couple of days. The strength of the upper wicks, which shows how determined the bears are to defend the resistance zone, is also important to monitor.
Key Support Levels: $1650 & $1420
Key Resistance Levels: $1800 & $2100
Daily Moving Averages:
The ETH/BTC Chart
On the ETH/BTC chart, the ascending line (in orange) is now acting as resistance. Additionally, for the third time in 50 days, the 14-day Relative Strength Index (RSI) has encountered resistance at the descending line (in white) after reaching above 70 again. This is considered an overbought zone, and because of the negative divergence (in red), it appears the trend is steadily becoming weaker.
A trend reversal can be initiated with a break and close below 0.08 BTC. The next support in this situation will likely be found at 0.073 BTC.
Key Support Levels: 0.0.0.08 & 0.073 BTC
Key Resistance Levels: 0.088 & 0.093 BTC
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