Ethereum price recorded a strong increase and finally crossed the upper boundary of the channel. Despite this, the cryptocurrency is approaching a critical resistance area, and if a breakout occurs, an impulsive uptrend is more likely.
Ethereum price has witnessed an upward trend since breaking above the 50- and 100-day moving averages, and it is currently reaching the critical resistance area at $1.6K.
This price area consists of two important resistance levels; The fixed resistance level at $1.6000, which has been a strong barrier against the price in recent months, and the previous high at $1,680, which usually acts as resistance to the upside.
All in all, pushing the price above this major resistance level could be a challenge, and if it succeeds, the market could explode.
However, given that the price is entering the overbought area of the RSI, a short-term consolidation may be possible before the next impulsive move.
4 hour chart
During the four-hour period, the price formed higher highs and higher lows, which is a typical bullish signal. However, the cryptocurrency simultaneously entered a short-term consolidation and reached the $1.6K resistance level.
It seems that Ethereum has gained enough momentum to clear the $1.6K resistance area. However, the current bearish divergence between the price and the RSI might stop the current bullish trend in the short term and result in a correction phase with low volatility.
Ethereum Trader Buy Sell Ratio (SMA 100)
The price of Ethereum has been greatly influenced by the futures market in recent years.
This graph represents the Buy and Sell Taker ratio with a standard 100-day moving average applied. This ratio shows whether the bulls or bears are executing their trades more aggressively, with values above 1 indicating an uptrend and a value below 1 denoting a downtrend.
This metric has been rising in recent weeks, indicating a positive change in sentiment in the futures market, followed by a recent price rally.
While the gauge is currently above 1 and heading higher, a reversal of its trend likely indicates the possibility of a bearish reversal and should be closely watched in the near term.
ETH Consolidation After $1.6k Critical Resistance, What Next? (Ethereum Price Analysis) appeared first on CryptoPotato.