Ethereum Price Analysis: Will $3,000 Prove to Be Too Big of an Obstacle for the Short Term?
Ethereum’s price action has been very bullish in recent weeks, with several resistance levels being broken through. However, the price has reached a key level that might cause problems.
Technical Analysis
By TradingRage
The Daily Chart
On the daily chart, the price has been rallying after rebounding from the $2,200 support level a month ago. Both the $2,400 and $2,700 resistance levels have been broken with ease, and the price has also pushed above the large ascending channel. The $3,000 resistance level is currently being tested, and the market is failing to climb higher. ETH’s price might decline toward the $2,700 level in case a correction occurs before breaking higher.
The 4-Hour Chart
Looking at the 4-hour timeframe, the price has broken the ascending channel to the upside, retested the higher boundary, and risen toward the $3,000 level. However, this resistance level has rejected the price to the downside, preventing a further rally.
Meanwhile, the Relative Strength Index is still showing values above 50%, indicating that a bullish continuation might still be probable. Yet, the price could retest the broken boundary of the large channel before doing so.
Sentiment Analysis
By TradingRage
Ethereum Funding Rates
Ethereum’s price has been rallying aggressively over the past few weeks. This has led to significant optimism among market participants regarding future price action, as they expect ETH to make a new all-time high soon.
This chart demonstrates the Ethereum funding rates. The funding rates show whether the sellers or the buyers are executing more aggressive orders (market orders) on aggregate. Positive values are associated with bullish sentiment, while negative ones indicate bearish expectations by futures traders.
It is evident that the funding rates have significantly risen over the recent uptrend. While this increase is logical due to the bullish market structure, it can also cause problems. The reasoning behind this statement is that these high values show an increased probability for long liquidation cascades, which could lead to sudden price drops.
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Filed under: Bitcoin - @ February 22, 2024 2:26 pm