Ethereum has been in a spin for the past few days as the price is slowly but surely moving higher. However, market participants should remain cautious, as there are still more hurdles ahead for the cryptocurrency to form a sustained rally.
On the daily timeframe, the price finally broke above the 50-day moving average, after weeks of testing and failing. Currently, the $1300 resistance area has been breached to the upside, as the bullish momentum is not fading away.
In the event of a confirmed break, the 200-day moving average, which is around the $1,400 mark, would be the next important resistance level. An upward break above the mentioned moving average is likely to move the sentiment to a more positive state, and a short-term uptrend is very likely.
However, there is still a chance of a bearish rejection that could send the price down towards the $1,000 region if the 50-day moving average, which is heading around the $1,200 mark, does not provide strong support.
4 hour chart
Looking at the four hour period, there are more signs of anxiety. Although the price has risen rapidly in recent days, it has not yet reached the $1350 resistance. Its reaction to said level will indicate what the next few weeks will look like for Ethereum and whether another recovery or decline will occur.
The RSI indicator, which has been in the overbought area for a while, is also flashing a clear overbought signal, which increases the odds of rejection and a bearish reversal in the coming days. As a result, while the trend looks strongly bullish in this timeframe, some important warning signs point to a possible turn soon.
Open interest ETH
2022 was a terrible year for risky assets, especially in the cryptocurrency market. Ethereum has lost more than half of its value but has been relatively more resilient compared to Bitcoin recently, as it did not make a new low in the recent crash and may climb higher in the near term.
This chart shows open interest in ETH, which is one of the most valuable gauges for assessing futures market sentiment. The higher the OI value, the greater the risk of expected short-term volatility in the market. Looking at the chart, the open interest rate has been fluctuating in a narrow range recently without rising significantly, indicating conservative behavior in the futures market.
This can be interpreted as a bullish sign, as lower volatility will attract more investors back into the market and spot buying pressure is likely to lead to a more sustained price increase. While OI can change dramatically in a short period of time, things look much safer to reinvest in the second largest cryptocurrency than it was a few months ago.
ETH Holds Above $1,300 But Can the Bulls Push towards $1.4K Soon? (Ethereum Price Analysis) appeared first on CryptoPotato.