Ethereum
Can Ethereum Maintain Its Momentum? Key levels to watch
Ethereum, the world’s second-largest cryptocurrency, has been on a rollercoaster ride recently, falling below the psychologically important $3,000 threshold only to claw its way back. Ethereum Price Action has been a confusing mix of bullish and bearish signals.
Bullish Whispers: New Investors and Short-Term Spikes
A glimmer of hope has emerged for Ethereum bulls with a recent increase in the number of new addresses on the network. According to Glass node datathe number of new Ethereum addresses has skyrocketed, surpassing 160,000 – a stark contrast to the lows of less than 100,000 seen in January.
This influx of new users suggests growing interest and potential investment in Ethereum, even amid its recent struggles.
Source: Glassnode
Additionally, technical indicators on the 4-hour chart suggest a possible near-term recovery. Analysts at NewsBTC point to increased volatility, signified by widening Bollinger bands, which could pave the way for a temporary rise in prices. This strategic market move could be aimed at attracting buyers before the current downtrend resumes.
A bearish shadow looms: market sentiment and technical trends
But the jubilation may be short-lived. Overall market sentiment regarding cryptocurrencies remains decidedly negative, a trend that has persisted since the highly anticipated Bitcoin halving event in April failed to spark a significant market rally, according to data from Santiment, suggesting investor caution despite the brief price recovery.
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😒 The feeling towards #cryptoTop cap assets are still rather negative. This has been the case since April 19 $BTC #reduce by half did not immediately lead to an increase in market capitalizations throughout #cryptocurrency. With high uncertainty, small portfolios abandoning the sector could be… pic.twitter.com/7FXYheGnX0
–Santiment (@santimentfeed) May 9, 2024
Adding fuel to the bearish fire, Ethereum’s daily chart continues to paint a blurry picture. Technical analysts point to sustained breakouts in the price structure to the downside, indicating a potential continuation of the downtrend. Even the Relative Strength Index (RSI) is sitting at a low of 40, further reinforcing the bearish sentiment gripping the market.
Ethereum is now trading at $2,904. Chart: TradingView
Chart models and breakout potential: a neutral approach
Amid conflicting signals, veteran trader Peter Brandt offered a more neutral outlook. By analyzing Ethereum’s price chart, which he called “intriguing,” Brandt identified two potential technical patterns: a flag and a channel.
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ETH $ETH This becomes a very intriguing graph for me
The pattern is too long to be considered a flag, but a channel is the most likely labeling.
I could go either way with this painting pic.twitter.com/EeSa7SyAmA– Peter Brandt (@PeterLBrandt) May 9, 2024
While a flag usually signifies a continuation of the current trend after a brief pause, a channel allows price movement within a defined range. The ambiguity surrounding the exact pattern suggests a potential breakout in either direction, leaving Ethereum’s immediate future uncertain.
Ethereum: the road ahead
With conflicting technical signals and a market shrouded in negativity, Ethereum’s future trajectory remains shrouded in uncertainty. Although short-term price increases are possible, the long-term trend appears to be bearish.
The coming weeks will be crucial for Ethereum as it navigates these turbulent waters and attempts to chart a clear path in the coming weeks or months.
Featured image from Pexels, chart from TradingView