Ethereum reclaims $1K but beware of ETH “fakeout”

NEW DELHI (CoinChapter.com) — Ethereum (ETH) prices reclaimed $1,000 on Jun 20, with the long lower wicks on the daily candles indicating strong buying action near the lower levels. Moreover, ETH prices jumped 32% between June 18’s low ($884) and Jun 20’s high ($1,167).

The prime altcoin ended Monday up by 13.4% before bears moved to book profit on Jun 20 and pulled prices down. Bulls would likely try to consolidate above immediate support near $1,000 before pushing ETH to target resistance near $1,180.

Meanwhile, the relative strength index for ETH remains in the oversold region, with a value of 28.11 on the daily chart. The RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions. Traders often consider oversold RSI values as a buy signal.

Furthermore, the rising RSI trendline indicates declining selling pressure for Ether prices. Therefore, moving above immediate resistance might help ETH prices target resistance from their 20-day exponential moving average (20-day EMA, red wave) near $1,400.

Also Read: Ethereum is about to kill a multi-billion dollar mining industry  — is there a way out for investors?

Finally, a sustained uptrend might even see Ether prices rise to $1,700 before corrections pare gains.

Conversely, if ETH fails to maintain current levels, the altcoin’s prices might breach below immediate support and fall to $850. Moreover, with the current macro scenario and the Federal Reserve’s decision to hike benchmark rates into 2023, ETH prices might fall to $730 before bottoming out.

Analyst Says ETH Rebound Is A Fakeout

A crypto trader and investor, who goes by the moniker Posty on Twitter, asserted Ether’s recent rebound might be a “clean fakeout.”

In detail, a fakeout occurs when a cryptocurrency’s prices sharply reverse their current trend without enough bullish tailwinds. As a result, traders entering a position anticipating a future price movement suffer losses.

Other analysts also speculate that ETH will reach its bottom at around $700.

Also Read: Over 7.5M failed transactions recorded on Ethereum blockchain in June.

Investors remain worried about the Fed’s hawkish stance on inflation, with the traditional financial markets hurting as well. Moreover, increased benchmark rates might result in lesser liquidity for riskier assets like cryptos.

Additionally, news of insolvency issues at Three Arrows Capital combined with Celsius freezing withdrawals further dampened investor morale. Since most of the DeFi sector utilizes Ether tokens or the Ethereum blockchain, a sell-off in DeFi markets would likely hurt ETH prices.

At the time of writing, ETH was trading at $1,107, down 1.7% on the day.