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21 April 2021
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Ethereum

ETH Price Analysis: Return Rally Gains Traction To Propel

Ethereum (ETH) gains traction to enable the next push beyond the prior high zones of last week amid the change in momentum in support of the bulls. Earlier ETH/USD failed to maintain its early gains and turned lower at the end of the week.

*ETH rebounds from the near term support level at $1,980
*Return rally gains traction to propel beyond the $2,200 level.
*Ethereum Address activity at 35 months high

ETH’s strong bounce from significant support at $1,980 that returned near the upper pivot at $2,100 zone, has sidelined growing downside risk. A tailed daily candle was formed today and it underpins fresh recovery which requires a firm break above the $2,100 resistance zone to generate a fresh bullish signal for an extension. As traders take profit on their bearish positions a return rally gains traction to propel beyond the $2,200 level. At the time of this post, ETH/USD is exchanging at $2,070 and dropped 5% over the past week from the record high set. The market cap stands at $240.9 billion, with $29.7 billion traded in the past 24 hours.

Rising Ethereum Address Activity Precedes All-Time Highs

On-chain data can be useful for depicting the overall sentiment around a cryptocurrency, as it accurately reflects the activity taking place on the blockchain. In the case of Ethereum, daily new addresses created and addresses activity spiked ahead of the $2,145 all-time highs. Analysts usually track exchange deposits as a potential signal for a sell-off. Before the all-time high, analysts at Santiment, an on-chain analysis firm noted declining exchange deposits while stating ‘Ethereum has now surpassed $2,140 for the first time in history, address activity at 35 month high’.

ETH Daily Chart: Bullish

ETH/USD Daily Chart

The ETH/USD pair peaked above the $2,100 barrier on Friday’s strong rally and hit the highest levels since late Feb. An eventual close above the former top at $2,041 is a bullish signal for the final stretch towards the next layers of strong barriers at an anticipated $2,500/$2,600. A sustained break past the high at $2,100 is needed to reinforce bullish stance for extension of bull-leg from $1,980 near term low towards $2,145 (Apri 2 high), possibly to $2,200 level.

However, a horizontal resistance line at $2,100 capped the rally for now, but the overall bullish setup of daily analysis remains supportive for further upside. Corrective dips on overbought near-term analysis should be ideally contained above the rising daily moving average (MA 50) (currently at $1,750). The firm breach beneath the MA 50 zone at $1,750 levels would weaken the structure and increase downside risk.

ETH 4-Hour Chart: Ranging

ETH/USD 4-Hour Chart

Despite a solid technical rebound from the $1,980 support level during the current session, Ethereum is still beneath the prior week’s high. Although the ETH/USD pair trades below the $2,100 mark, the four-hour time frame shows four consecutive bullish candlesticks rising trend in play. The ETH/USD pair may be set to break past the $2,100 mark, based on the size of the pattern.

On the contrary, a sustained break below $1,980 support would potentially pave the way for a move back towards $1,900 near term support, with the moving averages (4-hour MA 50) being additional bearish targets in the interim. Alternatively, if support at $1,980 holds and ETH eventually breaks through resistance at $2,100, then the price may go on to test prior reference points at $2,041 and $2,145 before deciding on its next move.

Key Levels
Resistance Levels: $2,200, $2,145, $2,100
Support Levels: $1,980, $1,900, $1,800

Image Credit: Tradingview

Note: coinpedia.org is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event.

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