Ethereum has recently shown a strong uptrend, starting from the key support level of $3,350. The price is now trading above $3,450 and the 100-hourly Simple Moving Average, indicating a bullish momentum in the market. Additionally, there was a break above a significant bearish trend line with resistance near $3,460 on the hourly chart of ETH/USD.
Formation of Double-Bottom Pattern
One of the key factors contributing to Ethereum’s surge is the formation of a double-bottom pattern near the $3,350 support zone. This pattern signified a reversal in the downtrend and paved the way for a fresh increase in price. Ethereum’s performance has surpassed that of Bitcoin, with the price breaking above the $3,500 resistance level.
Looking ahead, Ethereum might face resistance near the $3,580 level or the 76.4% Fib retracement level of the downward move from the $3,650 swing high to the $3,350 low. The immediate major resistance lies at $3,650, and a break above this level could propel the price towards $3,720 and eventually $3,750. Further upside momentum could lead Ethereum to test the $3,880 resistance, with a potential move towards the $4,000 level in the coming days.
Downside Risks
On the flip side, if Ethereum fails to clear the $3,580 resistance, it might experience a downside correction. The initial support level is near $3,500, followed by a major support level at $3,450. A breach below $3,450 could trigger a sell-off towards $3,350, with further losses potentially pushing the price towards the $3,220 level in the short term.
The hourly MACD for ETH/USD is currently gaining momentum in the bullish zone, indicating a strengthening uptrend. Moreover, the hourly RSI has crossed above the 50 zone, suggesting an increase in buying pressure and a potential continuation of the rally.
Overall, Ethereum’s recent price action reflects a strong bullish sentiment in the market, with the potential for further gains in the near term. However, traders should remain cautious of potential resistance levels and downside risks as they navigate the volatile cryptocurrency market.