What you need to know:
- Ethereum’s price is trading well above key support levels, which is a sign that there is good upside momentum.
- Analysts are watching to see if Ethereum can break above the critical resistance point at $3,500.
- Most Ethereum technical indicators point to an upward trend.
Ethereum maintains a bullish price structure as traders are confident in the upward direction of the price. After a strong, impulsive upward movement, the market has transitioned from expansion to controlled consolidation. This indicates that the price is showing signs of strength, not weakness.
This type of price behavior usually signals growing confidence among short and swing term traders. Ethereum continues to trade above previous resistance levels. These areas have become new support levels and continue to reinforce the bullish outlook.
Ethereum trend structure is still bullish
According to Alpha Crypto analysisEthereum’s structure remains bullish on lower time frames. As seen on the 4-hour chart, Ethereum continues to make higher lows after the breakout. When buyers absorb supply during pullbacks, it is a signal that buyers are taking control.
On the 4-hour chart, Ethereum continues to honor the 9 EMA during minor pullbacks. The continued respect for the 9 EMA is a sign of near-term momentum despite the consolidation.
Furthermore, this type of orderly consolidation versus an impulsive pullback helps show that the price is in a healthy bull phase. The 50 Simple Moving Average (SMA) is another structural support level.
On the 4-hour chart, Ethereum is trading above the rising 50 SMA. As long as the price remains above the 50 SMA, the broader trend will remain intact.
Source: X
Also read | Ethereum (ETH) price rises as the number of daily transactions reaches a record 2.3 million
Ethereum remains above trend-setting levels
One of the other structural supports that strengthen the current setup is the 200 Exponential Moving Average (EMA). As seen on the 4-hour chart, Ethereum is comfortably above the 200 EMA.
This position reinforces the bullish bias on the higher time frames. Historically, the 200 EMA has functioned as a trend filter separating bullish trends from bearish trends.
As long as the price remains above the 200 EMA, any downward moves will be classified as corrective. This will increase confidence that the current consolidation phase is a healthy bull phase.
200-EMA. Source: Trading view
Structural bullish bias supported by indicators
Momentum indicators also support the bullish structure. Despite some recent flatness, the MACD is still above the zero line. This is a sign that momentum has been reset and no steam is being lost.
To confirm, traders are looking forward to a renewed expansion of the histogram. The relative strength index (RSI) provides additional context. The RSI is currently trading above the neutral level of 50, confirming that the bullish momentum is still intact.
During the consolidation period, the RSI has remained far enough away from extreme overbought conditions to reduce the likelihood of a steep correction. However, the current position of the RSI does provide a solid basis for the continuation bias.
MACD and RSI. Source: Trading view
$3,500 zone provides focus for upside action
Currently, the USD 3,500 resistance point is the main target for the bulls. Both psychologically and technically, the $3,500 level acts as a barrier to upward movement. A successful breakout above this level would confirm the next leg higher.
However, a decisive breakdown of the previously mentioned supports would call the bullish thesis into question. In such a case, the structural integrity of the trend would begin to weaken.
Also read | Ethereum Stake Crosses $121 Billion as Price Tests Key Zone
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