A technical rebound that begins to apply to something! – Since the middle of last week, Ethereum (ETH) has clearly recovered from the critical support of $1000. As we speak, he would be on the verge of overcoming his next resistance. To the point that a technical rebound begins to take shape. The announcement of a date for the future The Merge likely served as a catalyst for the upside. But on the other hand, it is not such a powerful catalyst that it could single-handedly reverse the current bear run since its last ATH in November 2021.
If the latest technical analyzes have shown us that the end of the second wave of correction since the last failure below the resistance of $3400 seems to be behind us, there would still be work to do to hope for more than a technical rebound. Especially since the cheek is still open for many investors after a drop of about three quarters of its market capitalization.
But after a long dark period, let’s not hide the pleasure of witnessing a fairly noticeable return to form from the prince of cryptos. Now, let’s assess the potential of this technical rebound which is however moving within a bear market, until proven otherwise.
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Ethereum in weekly units – On track to cross $1400
without igniting, it is a reduction of finding that the price of Ethereum crosses the resistance of $1400. Better still, they could do the same vis-à-vis the Tenkan. With the objective of heading towards the Kijun which has been stabilizing for a few weeks near the resistance of $2300. And this would simultaneously coincide with the rebound of the Chikou Span on the same levels.
However, this potential technical rebound does not change the current price positioning of ETH and Chikou Span against Kumo (Ichimoku cloud). Even if we have to go beyond the descending line since its last ATH in November 2021, the bar would remain very high to hope to return to the right side of the barrier in the long term. Moreover, the significant thickness of the future Kumo (blue dot) could represent sooner or later a headwind to consider a return of a next bull run.
In any case, if the prince of cryptos manages to finally tame the $1400 this week, the resistance of $1700 would be in sight. As a result, sellers who invested late would be caught off guard. And so, they would dearly redeem their positions to the point of accentuating the technical rebound beyond the natural objective.
Ethereum in daily units – The prices back inside the Kumo
The series of two bullish candles in weekly units (including this week’s) validated a triple bottom following an aborted double bottom last week. Especially since the way is likely to reassure investors. Indeed, the final theoretical objective of the chartist figure is more than achieved. And at the same time, the price of Ethereum reintegrated Kumo and would be a stone’s throw from the resistance of $1700, one of the key levels of the last bull run.
In the event that the prince of cryptos would afford the luxury of well above $1700, he would first break through the Ichimoku cloud, then approach both the resistance of $2300 and the descending line. . Nevertheless, the Chikou Span could remain below the Kumo’s upper limit, the Senkou Span B (SSB). This technical signal would suggest that we are close to the potential limit of the technical rebound that is taking shape.
In summary, Ethereum’s bear run since its last ATH in November 2021 is finally beginning a logical pause given the scale of last spring’s correction. But from there to consider that the technical rebound can lead to a trend reversal, we will beware of any hasty assumptions.
On the one hand, the aggressive monetary tightening by central banks does not militate for a raid on risky asset classes. And more particularly for cryptocurrencies. On the other hand, the weekly chart remains unsatisfactory, if we are to take a long-term view of the price position of ETH and the Chikou Span against Kumo.
By putting these arguments end to end, I fear that the year 2022 is likely to be of the same ilk as 2018. Hence the possibility of new lows which would occur during the second half of the year. In which case, the prince of cryptos would push the $1000 towards the $700 support.
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