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.

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

BEST CRYPTO BROKERS/EXCHANGES




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

BTC

ETH

XRP