• Ethereum price continuing constructive consolidation above previous all-time high.
  • Options expiration generated upside volatility.
  • 10-week simple moving average (SMA) acting as critical support on a closing basis.

Ethereum price is about to close today, down only 5.8% for the week, a minor blip in the overall picture and certainly far removed from the graphic headlines describing ETH price action earlier this week. From a longer-term perspective, the trend remains higher, but the correction process does need more time to release the extreme overbought condition that accompanied the race into new highs.

Ethereum price consolidation could take time

A cryptocurrency that advances almost 2200% in one year with only one 50% correction is vulnerable to a deep and drawn-out correction. ETH is now in the early stages of that process, and keep in mind that corrections are not only in price but also in time. So there is every reason to expect that this consolidation will test the patience of the bulls.

The current correction signals were prominent, particularly in rapid decline in trading volume once ETH broke out to all-time highs. For the week beginning January 4 this year, ETH closed with volume of 5.33M, and by the time of the ultimate high during the week of February 15, volume was just 1.83M, representing a 65% decline. Attempting to conquer the psychologically important $2,000 level combined with the looming 1.618 Fibonacci extension at $2,247 would not happen on average volume.

Moving forward, ETH will likely consolidate for several more weeks (ideally) with support coming from the 10-week SMA at $1,652.90, the January 2018 high at $1,419.96, and then the 0.382 Fibonacci retracement level of the 2020-2021 rally at $1,296.

A price push above $1,944 could signal that the correction process is over, but it will probably be another fake-out to the upside. Of course, a weekly close above $2,000 will negate the working thesis of a prolonged correction.

ETH/USD Weekly Chart

ETH/USD weekly chart

On the downside, a weekly close below the February 28 low at $1,292.76 would reset the working thesis and open up the possibility that a test of the 0.50 retracement level is on the horizon.

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.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Bitcoin adoption accelerates as coiling prices hint at explosive rally

Bitcoin price faces a stiff resistance wall that has prevented weak bullish momentum from passing through. As a result, a short-lived retracement has caused a majority of the market to follow suit despite BTC’s raging adoption and interest from institutions over the past week.

More Bitcoin News

VeChain upswing thwarted again as sell signals multiply

VeChain price shows an ambiguous outlook as it has set up a textbook uptrend with a series of higher highs and higher lows, but technical indicators hint at a downtrend.

More VeChain News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Judge Sarah Netburn has restated that the Securities and Exchange Commission (SEC) must produce documents related to Bitcoin, Ether, and XRP amid the ongoing legal battle with Ripple Labs.

More Ripple News

Polkadot Price Prediction: DOT hints at minor retracement before resuming its rally

Polkadot price shows a slowdown in its bullish momentum that has resulted in sellers taking over. Now, a minor retracement could push DOT into a significant support barrier.

More Polkadot 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