Ethereum Price Prediction: ETH may correct 17% if crucial supply barrier is not breached

  • Ethereum price is trading below the middle line of an ascending parallel channel.
  • ETH could experience a 17% retracement to $1,735 if it gets rejected here.
  • A new all-time high at $2,500 seems plausible if the breakout line at $2,350 is conquered.

The Ethereum price could retrace soon as multiple time frames hint at bulls’ exhaustion.

Ethereum price at inflection point

The Ethereum price set up multiple higher highs and higher lows since January 13. An ascending parallel channel forms when these swing points are connected using trend lines.

The latest swing low was created on March 25, which resulted in a 38% upswing just above $2,000. However, sellers have managed to push ETH below the parallel channel’s middle line to where it currently trades at $2,083.

The smart contracts platform token faces a crucial decision that could determine its trend for the foreseeable future. 

If the buyers can manage to sustain above the Momentum Reversal Indicator’s (MRI) breakout line at $2,350, the Ethereum price could soon set up a new all-time high at $2,500.

However, a decisive close below $2,041 will see ETH drop 13% toward the 50-day Simple Moving Average (SMA). This level coincides with the 78.6% Fibonacci retracement level.

Supporting the bearish scenario is the weekly chart, which shows the Ethereum price forming higher highs while the Relative Strength Index (RSI) has created lower highs. Such a setup is known as a bearish divergence and forecasts a correction.

Additionally, the RSI is in the overbought zone, suggesting an overextended rally. The MRI complies with the RSI’s bearish outlook as it has spawned multiple A, B and C extensions, which indicate an incoming reversal.

ETH/USD 1-day and 1-week chart

ETH/USD 1-day and 1-week chart

The number of whales holding 1,000,000 to 10,000,000 ETH tokens seems to significantly influence the Ethereum price, as seen in the chart below. A surge in these investors’ holdings saw the market value of ETH appreciate and vice versa.

Two of these market participants have left this category after the smart contracts platform created a new high at $2,144 on April 2. This 18% reduction in whales paints a bearish outlook for Ethereum.

Ethereum supply distribution chart

Ethereum supply distribution chart

Although ETH’s scenario looks grim, a bullish narrative is not unlikely, especially considering the declining ETH balance on exchanges.

Ether’s supply as a percent of total supply held by centralized entities has dropped 4% since hitting the record levels on April 2. This shrinkage effectively reduces the selling pressure and suggests that investors are confident in the bullish potential of ETH.

Ethereum supply on exchanges chart

Ethereum supply on exchanges chart

A daily candlestick close above the MRI’s breakout line at $2,350 will trigger buyers to jump on the bandwagon. In such a case, the Ethereum price could surge 6% to the immediate supply barrier at $2,500.

Upon breaching this level, the altcoin giant could increase 10% to hit the 141.4% Fibonacci extension level at $2,765.

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.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Ripple rides RWA narrative with Archax collaboration, XRP extends seventh day of losses to 8%

Ripple rides RWA narrative with Archax collaboration, XRP extends seventh day of losses to 8%

Ripple announced that the payment remittance firm extended its collaboration with FCA regulated digital securities exchange Archax. The collaboration is focused on Real World Asset tokenization, an emerging narrative in the ecosystem. 

More Ripple News

ONDO extends gains despite surge in profit-taking

ONDO extends gains despite surge in profit-taking

ONDO, the governance token of Ondo Finance, trades in the green on Friday, defying the effects of a surge in profit taking from large-wallet investors following the 76% gains seen in the past 30 days. 

More ONDO News

Monero price poised for a downward correction

Monero price poised for a downward correction

Monero (XMR) price has encountered resistance at a critical level. The technical outlook suggests a potential short-term correction as momentum indicators signal a bearish divergence.

More Cryptocurrencies News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin braces for potential short-term correction

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin braces for  potential short-term correction

Bitcoin price daily candlestick closes below the weekly support level of $67,147. Ethereum price is weakening and could retrace to its immediate support at $3,321. Ripple price fails to close above the 50-day Exponential Moving Average.

More Cryptocurrencies News

Bitcoin: Has BTC found a local price bottom?

Bitcoin: Has BTC found a local price bottom?

Bitcoin (BTC) price looks set for a mild fall this week, weighed by slight outflows in the US spot ETFs and the US Federal Reserve (Fed) keeping a hawkish interest-rate outlook despite easing inflation. Technical indicators suggest that BTC could face a further 5% correction in the short term before resuming the uptrend.

Read full analysis