Key Ethereum Takeaways:
- Ethereum, the second-largest cryptocurrency by market cap, faced bearish technicals on the daily and the weekly charts.
- On-chain metrics indicated the largest buy-call spike in a month, which could result in a bullish reversal.
YEREVAN (CoinChapter.com) – Ethereum’s price today stood at $2,425 in the European session. The price action gave Ethereum (ETH) bulls some consolation, as it moved sideways rather than crashing below the significant support line (marked orange on the chart below). However, the second-largest cryptocurrency mainly mimicked Bitcoin (BTC) chart and flashed bearish technicals on different time frame graphs.
ETHUSD Daily Chart
The alpha altcoin broke below another significant support line on Jan 21, bringing the month-to-date loss to 37% on Jan 25. The said support has been instrumental since early November, and getting back over it might pose a challenge. However, Ether held the support at $2,413 and boosted its tanked relative strength index (RSI).
In short, the RSI is a momentum indicator that tells traders whether the value of a particular asset is ‘fair’ in the current market conditions. When RSI falls below 30, the asset is considered “oversold,” and many traders who watch the indicator might decide to enter the market and buy the dip. As a result, the price climbs.
Also read: Ethereum (ETH) whales on the move despite the over 34% drop.
However, the weekly chart paints a bearish picture, as several technical indicators point to a looming decline.
Bearish Ethereum Weekly Price Chart
Ether’s weekly chart hinted at a bearish continuation, as the token broke several supports and formed a bearish setup. In detail, ETH/USD price action formed a Rising Wedge. The formation consists of two converging trendlines with a positive slope and lowers the price swing as the pattern progresses.
The Rising Wedge is a reversal pattern, and it played out the bearish scenario in the previous week, breaking the setup’s lower trendline. Additionally, Ether registered a bearish RSI divergence. The latter occurs when the price action prints higher highs, while the RSI indicator registers lower highs.
Also read: New Ethereum killer born? Startup aims to solve higher gas fees problem using dollar.
The divergence could result in a further downtrend for the digital asset unless ETH bulls pick up the pace. But according to analytical platform Santiment, the market could be ready for recovery.
Will Ethereum Recover?
Santiment claims that the FUD turned to FOMO, as Monday saw a buy call boost that turned out to be the biggest over January. According to the platform, Bitcoin, Ethereum, and alt-buys picked up after the bloody Sunday’s negative trading returns.
Also read: Ethereum NFT markets continue to surf the FOMO wave.
Moreover, as CoinChapter pointed out in the previous Ethereum review, the off-exchange whales are also on the move and stacking up on Ether. Additionally, another analytical platform, Glassnode, reported growing ETH 2.0 deposits. The upgrade has over 9.19 million ETH coins locked.
Also read: Bitcoin (BTC) ended the bull cycle? MVRV might have the answer.
Even though technicals are not favoring the Ethereum bulls in the short term, the positive developments and whale investments could pick up the price in the upcoming sessions, following Bitcoin’s example.
