Ethereum’s V-Shaped Recovery: Breaking the Bull Case

TLDR

The price of Ethereum has recently increased above $2650. There is a discussion that it may go up to $3,000. The price has dropped from $3,500, but it may be lower. The currency stock is showing signs of accumulation.

Ethereum, the second largest by market capitalization, has been experiencing various price movements in recent weeks. After reaching highs around $3,500, the price has seen a sharp decline. However, recent evidence suggests that a recovery may be underway.

The price of Ethereum recently rose above the $2,650 mark, indicating strength against Bitcoin. This rise came after finding support around $2,520.

The upward move pushed Ethereum to $2,732 before pulling back a bit.

Currently, Ethereum is trading above $2,670 and the 100-hour simple moving average on the short-term charts. A triangle pattern has formed with support at $2,670, indicating a period of consolidation. If the price continues to rise, it may face resistance around $2,720 and $2,750.

Some analysts believe that a break above $2,750 could pave the way to $2,820 and possibly $3,000.

However, recent price history shows some volatility. After rejecting the $3,500 level, Ethereum experienced a major decline.

This decline has crossed several key support levels including $3,200 (200-day moving average), $3,000 and $2,700. The price tested the $2,200 support zone before showing signs of recovery.

The daily chart shows the extent of this decline, with the price falling below the important 200-day moving average. This step was seen as negligent by many traders.

However, recent price action has been more positive, with a strong uptrend occurring over the past day. This has led to speculation that a rapid V-shaped recovery is possible.

On the 4-hour chart, technical indicators such as the relative strength index (RSI) have moved above the 50% level, which indicates the presence of high momentum in the short term. If Ethereum can break the resistance level of $2,700, it may continue towards $3,000.

On-chain data provides additional context for these price movements. The Ethereum Exchange Reserve Index, which measures the amount held on ETH exchanges, has shown interesting trends.

During the recent price drop, this metric has increased, indicating that many investors are sending their Ethereum to exchanges, possibly to sell. However, the gauge fell below the 30-day moving average and started to decline again. This may indicate that few people are looking to sell and others are choosing to hold or buy Ethereum.

If Ethereum fails to break above $2,720, it may face a downside move. Support levels seen in this case would be $2,670, $2,640 and $2,620. A drop below these could bring the price to the $2,550 or even $2,520 level.

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