Ethereum price poised for 20% rally due to these reasons
- Ethereum price shows a bullish pennant formation with a theoretical forecast of $2,055.
- Second confirmation of uptrend will arrive after ETH flips breakout line at $1,801.
- Invalidation of ETH’s bullish thesis will occur on flipping the $1,554 support level into a resistance barrier.
Ethereum (ETH) price shows a clear sign of consolidation around a significantly important monthly resistance level. Although ETH has flipped this hurdle into a support floor on the lower timeframes, investors need to wait for a decisive breakout from the pennant to confirm the start of the second leg.
Ether is at the center of popularity due to its upcoming network upgrade - the Shanghai hard fork. According to CoinStats, the smart contract token has a total market capitalization of $204 billion, and this number is only going to increase due to the bullish outlooks seen both in its fundamentals and technicals.
CoinStats
Ethereum price prepares for its next bullish phase
Ethereum price rallied nearly 20% between February 13 and 23. As ETH entangled with the monthly resistance level at $1,677, the consolidation kick-started. During this sideways movement, Ether has produced two higher lows and two lower highs, denoting a pennant formation.
Together, the Ethereum price action between February 13 and 20, shows a bullish pennant formation. This setup forecasts a 20% upswing, which is obtained by measuring the distance of the initial run-up and adding it to the breakout point on the pennant.
Assuming a breach of the pennant occurs around $1,720, a 20% move would put the Ethereum price target at $2,055.
Supporting this optimistic outlook for Ethereum price is the hidden bullish divergence seen between the Ether price move and the Relative Strength Index (RSI). This technical formation is spotted when the price forms higher lows, but the momentum indicator produces lower lows.
This setup often leads to an explosive surge in bullish momentum that propels the underlying asset’s price.
While a decisive break of the pennant would be the initial confirmation of an upswing, market participants can wait for a four-hour candlestick close above the breakout line at $1,801.
ETH/USDT 1-day chart
Although the bullish outlook for Ethereum price makes logical sense, investors need to be cautious as a fatal crash in Bitcoin price would undo everything for ETH. A decisive flip of the $1,554 support level on the four-hour and the daily timeframe would invalidate the bullish thesis.
Such a development would see Ethereum price crash to the $1,329 support floor.
Ethereum network grows but so do scams
The number of investors holding Ethereum (ETH) grew from 25 million to 87 million in 2022. With many new upgrades to the Ethereum blockchain set to debut in 2023 and the resumption of the 2023 bull run is likely going to boost the network further. Investors can also see a swift growth in Layer 2 solutions like Arbitrum and Polygon. Additionally, the implementation of the zkSnark (Zero-knowledge) technology has also brought a renewed interest among investors.
In a recent tweet, the Ethereum Denver Twitter account noted that hackers targeted their Ethereum Denver website. Soon after Blockfence tweeted and tagged this website as "high risk." Interestingly, the involved bad actors have also promoted the fake ETH Denver website on Google. To make matters worse, the website appeared before the original website, which could attract a lot of unbeknownst investors.
Although the cryptocurrency scams have decreased in recent months, scammers or hackers are finding new and improved ways to steal money.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
