• 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. 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

MATIC price goes cold, as Polygon financial metric offers an interesting twist

MATIC price is up 47.66% since July 21, establishing one of the better rallies in the cryptocurrency complex over that time. The rally has placed Polygon at the junction of the symmetrical triangle’s apex with the 50-day SMA at $1.07. 

More Polygon news

Cardano price action and on-chain metric collide, reveals a complex situation for ADA

The price staged a rebound in Jul after dropping near the 38.2% Fib retracement at $0.971, marking the fifth consecutive month of a bullish reversal from the level. ADA has shaped a head-and-shoulders pattern with a measured move of approximately 60%.

More Cardano news

VeChain Price Forecast: VET postures for a 40% gain as energy builds

VeChain price has built on the rebound from the 50-week SMA, registering a 15.21% gain last week and closing July with a minor decline of -1.64%. The persistence of the Anchored VWAP has been containing a rally continuation since the July 26 high.

More VeChain news

Three reasons why Shiba Inu price will quickly drop 45%

Shiba Inu price has trended lower in a descending parallel channel since the May crash, offering only brief opportunities from low probability patterns or setups. The weak performance is a marked deviation from the extreme price events in early May.

More Shiba Inu 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