Since the start of 2023, the cryptocurrency markets have been bullish, likely due to the Federal Reserve's potential dovish stance. This could be seen as a sign of confidence in the digital asset class, as investors are increasingly optimistic about the future of cryptocurrencies.
Ethereum is trading within a falling wedge
ETH forming a head and shoulders pattern on the four charts
The price of Ethereum has reversed from the bottom of an ascending channel line
surpassing expectations and delivering impressive gains in January. Traders are eagerly anticipating the US Federal Reserve's rate hike announcement and its potential implications for the cryptocurrency industry.
Ethereum is attempting to surge past the $1,580 resistance against the US Dollar. If ETH can break through the $1,610 resistance zone, it could gain bullish momentum. Ethereum price recently dropped below the $1,600 support zone, but the ETH bulls were quick to respond near the $1,550 level. A low was formed near $1,535 before the price began a notable uptrend, similar to that of Bitcoin.
After breaking above the $1,565 and $1,580 levels, the price surged past the 23.6% Fibonacci retracement level of the downward wave from the $1,660 swing high to the $1,535 low. Subsequently, it spiked above the $1,590 resistance and the 200 hour simple moving average, indicating a strong bullish momentum.
Ethereum price is currently facing a formidable resistance near the $1,600 zone and trading below the 100 hour simple moving average. Additionally, a key ascending channel is forming with support at $1,575 on the hourly chart of ETH/USD. This could be a critical juncture for the cryptocurrency, as a successful break above the resistance could propel it to new heights.
On the 4-hour chart, we can observe that Ethereum's price has been trading sideways over the past few days, forming what appears to be a Head and Shoulders pattern. In technical analysis, this pattern is typically seen as a bearish signal. Additionally, the coin has moved below both the 25-day and 50-day Exponential Moving Averages.
An immediate resistance is near the $1,610 level, which is close to the 50% Fibonacci retracement level of the downward wave from the $1,660 swing high to the $1,535 low. If the price breaks above this resistance zone, it could trigger a significant increase, potentially pushing ether towards the $1,660 resistance. Further gains could then take it to the $1,720 level.
If Ethereum fails to break through the $1,610 resistance, it could trigger a new downward trend. The first support level is close to the $1,550 level and the channel trend line. The next major support is near the $1,535 level. If the price drops below this point, it could plummet to the $1,500 support. Further losses could see Ethereum testing the $1,450 zone in the short-term. If the bearish momentum persists, the cryptocurrency could even retest the $1,320 zone in the near future.
According to price analysis, the market capitalization of Ethereum is estimated to be around $193,409,775,811. Its 24-hour trading volume is approximately $6,197,518,366, indicating a 0.57% rise by market capitalization and a 18.18% decrease in transaction volume during intraday trading.
KEY LEVELS :
RESISTANCE LEVEL : $1,610-$1,660
SUPPORT LEVEL : $1,540-$1,500
Therefore, after its impressive performance in January, it is possible that Ethereum's price could experience a bearish breakout in February. Please share your thoughts in the comments section below.