Will ETH’s Sideways Action End By a Huge Move?

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After reach­ing a high of $2030 on August 14, Ethereum’s price began a cor­rec­tive wave, form­ing a descend­ing chan­nel – as shown in blue on the fol­low­ing chart.

The bot­tom of this chan­nel, com­bined with the 200-week mov­ing aver­age line (in yel­low), act­ed as sup­port and pre­vent­ed the price from drop­ping fur­ther. This result­ed in the devel­op­ment of a local low at $1,220.

A bull­ish wave towards the channel’s top will only occur if buy­ers can reclaim $1,420 (in red). In this case, the short-term tar­get would be $1,550. On the oth­er hand, if ETH breaks below the 200-week MA line, we can expect fur­ther decline towards the $1K zone.

The bot­tom of the chan­nel cur­rent­ly lies at around $1,170. This, togeth­er with $1,220, com­bines the first sig­nif­i­cant sup­port range.

Key Sup­port Lev­els: $1280 / $1,220 & $1170

Key Resis­tance Lev­els: $1420 & $1550

Dai­ly Mov­ing Averages:

MA20: $1391
MA50: $1554
MA100: $1487
MA200: $1960

The ETH/BTC Chart

Against Bit­coin, the descend­ing line (in yel­low) act­ed as sup­port fol­low­ing the major drop after The Merge event.

The ini­tial attempt to breach above the 23.6% Fib lev­el resis­tance at 0.07 BTC (in blue) has failed. As the 38.2%, Fib lev­el over­laps with the resis­tance at 0.073 BTC (in white), a break and close above it may indi­cate a trend rever­sal. On the oth­er hand, the first major sup­port lies around 0.065 BTC (in green).

It’s worth men­tion­ing that sev­er­al times so far in 2022, this lev­el has effec­tive­ly sup­port­ed the price.

Key Sup­port Lev­els: 0.065 & 0.06 BTC

Key Resis­tance Lev­els: 0.073 & 0.08 BTC

Tech­ni­cal Analy­sis By Griz­zly

On-chain Analysis

Exchange Reserve – Derivative Exchanges

Def­i­n­i­tion: The total num­ber of coins held on exchanges.

An intrigu­ing pat­tern may be found in the sup­ply held in deriv­a­tive mar­kets since 2017. Bull­ish ral­lies that have result­ed in all-time highs have been fol­lowed by a dra­mat­ic decrease in sup­ply on deriv­a­tive mar­kets. This was prob­a­bly due to the dom­i­nance of the spot mar­ket, as investors have eased sell­ing pres­sure by with­draw­ing their coins.

On the oth­er hand, bear mar­kets cor­re­spond­ed with coins being sent into deriv­a­tives exchanges. This met­ric is now increas­ing in val­ue, and his­tor­i­cal data sug­gests that no sub­stan­tial price change is expected.

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Dis­claimer: Infor­ma­tion found on Cryp­toPota­to is those of writ­ers quot­ed. It does not rep­re­sent the opin­ions of Cryp­toPota­to on whether to buy, sell, or hold any invest­ments. You are advised to con­duct your own research before mak­ing any invest­ment deci­sions. Use pro­vid­ed infor­ma­tion at your own risk. See Dis­claimer for more information.

Cryp­tocur­ren­cy charts by TradingView. 



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