Ethereum price opens above important indicators and is set for a smooth 5% profit

Ethereum (ETH) price is set to pop higher after the price action overnight, especially with the daily close above the 200-day Simple Moving Average (SMA) on Sunday at $3,490.59. Similarly on Monday morning ETH price was also able to open above the MA, setting the scene for another rally of roughly 5% towards $3,687.17. Following that, bulls will have reached the monthly R1 and will be very close to booking a new high for 2022.

ETH is on the cusp of booking new highs for the year if bulls overshoot

Ethereum price could be in for a treat this week after bulls opened price action above the 200-day SMA, which has been hanging over ETH price as a very bearish cap. Since the rejection on January 07, bulls have not been able to get near its vicinity for a test or break above, with Ethereum prices subdued to the downside. With the change in scenery, however, it looks like bulls are set to squeeze prices a few dollars higher. 

ETH price will see buyers targeting $3,687.17, which would result in a 5% profit for bulls who have only recently joined the rally. This target coincides with a historical and monthly R1 resistance level to the upside. In the event bulls are able to overshoot the area, expect to possibly see $3,800 and even $4,000 on the cards towards the end of the week if markets can keep risk-on momentum going into the weekend.

ETH/USD  daily chart

Risk to the downside comes with the Relative Strength Index (RSI) trading in overbought, which tells investors and bulls that there are no more profits to be booked. With this toppish signal, expect bulls to take more profit and possibly even close out on their profits in full since the rally from mid-March now holds roughly 38% gains. With that overflow in selling, expect the sell-side to be  over-offering, and the price to plie down towards $3,391.52 or even $3,018.55 as investors will want to wait for both the RSI to return to 50 and for XRP price to come up with an attractive discount before they contemplate getting involved again.