• Ethereum price stalls at the tactically important 50-day simple moving average (SMA), but overall price structure remains constructive.
  • ETH consolidation is about releasing price compression generated by the sharp rebound from the May 23 lows.
  • A downside break in price will discover overwhelming support at the February 20 high at $2,042.

Ethereum price has not recovered the relative strength that dominated the April-May period, but the response to the largest weekly loss of 41.44% has been constructive. Until ETH can gain sustainable price traction above the 50-day SMA, Ethereum price will be clouded with investor skepticism.

Ethereum price struggles to separate from broader crypto weakness

Ethereum price rallied just over 50% from the May 19 low at $1,900 before printing a new correction low on May 23. The new low was followed by a 70% bounce at the May 26 high. A bullish hammer candlestick on the 12-hour ETH chart initiated the rebound on May 23, and it was accompanied by above-average volume after reaching an oversold reading on the daily Relative Strength Index (RSI). Moreover, the May 23 undercut of the May 19 low has put Ethereum price in place for a double bottom pattern with a trigger price of $3,000.

The consecutive quick rebounds have frustrated any bearish narrative and have built up price compression that needs to be released by removing the weak ETH holders through pullbacks, such as today. Once complete, Ethereum price will be unfettered to test the double bottom trigger price.

A breakout above the double bottom will quickly discover resistance at the 61.8% Fibonacci retracement of the May decline at $3,369. If the rally continues, Ethereum price will be introduced to minor resistance at the 78.6% retracement at $3,815 before launching an assault on the all-time high at $4,384.

ETH/USD daily chart

ETH/USD daily chart

An aggressive renewal of selling in the cryptocurrency complex may derail the relatively positive outlook for Ethereum price. The most crucial level of support is the February 20 high at $2,042, a price that has been resistance and support in April and May on an intra-day and closing basis.

If selling does not halt, the May 23 low will offer modest support, but the vital level is the strategically important 200-day SMA at $1,638. It should motivate prominent investors and institutions to begin accumulating in size.

Conveying a bullish message for Ethereum price is the Santiment Market Value Realized Value (MVRV) metric. The current metric reading is negative despite the 70% bounce in ETH, indicating that the smart contracts giant remains undervalued.

ETH MVRV metric

ETH MVRV metric

In April and May, Ethereum price displayed relative strength by assuming leadership for the entire crypto market. The underlying fundamentals driving that performance have not changed, and ETH is just beginning to capture the interest of institutional investors.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

Since XRPArmy and lawyers in the crypto ecosystem consider the US Securities & and Exchange Commission’s (SEC) move to pull documents out of public view as evidence that the case is coming to a close, a Ripple win appears more likely.

More Ripple news

Bitcoin Weekly Forecast: BTC must hold $45K to target new all-time highs

Bitcoin price is on a rollercoaster ride as it crashed violently on September 7, consolidated for a few days after that and went on an uptrend to undo the losses. Over the past 24 hours, however, BTC seems to be consolidating for a volatile move without a clear directional bias.

More Bitcoin News

Chiliz price to retrace before CHZ runs up

Chiliz price is stuck in a tight consolidation above a crucial support floor and shows no signs of recovering from this slump. In fact, CHZ might retrace lower before heading on an uptrend.

More Chiliz News

ICX Price Prediction: ICON prepares for 20% descent as bulls fade away

ICON price looks ready for a swift downswing after an explosive run over the past ten days. The crypto markets’ slowdown after the recent run-up makes this bearish scenario a perfect fit. Going forward, investors can expect ICX to head lower and retest stable support barriers.

More Cryptocurrencies News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast