The prince of cryptos procrastinates again! – Although the FED did not give an inch on its monetary tightening, cryptocurrencies managed to spend the week without a hitch. As proof, the price of Ethereum (ETH) has furtively come close to crossing a key level that has been seriously bothering bulls for quite some time. Especially since hesitation currently prevails after the exceptional month of January.
Moreover, the latest technical analyzes show that the bulls are not definitely taking over against the bears. Indeed, the rebound we are witnessing on the prince of cryptos remains the result of a favorable (and potentially temporary) conjunction on both the dollar and bond rates. While at the same time, economic tensions are growing.
In a market context where bulls and bears are more opposed than ever, let’s now look at the possible scenarios for ETH. With the challenge of knowing if it will manage to cross a decisive course in order to open a new chapter in its history.
Ethereum in monthly units – The $1700 back in play
Thanks to a month of January which saw its market capitalization climb by nearly 32%, Ethereum is coming back very close to the resistance of $1700. But the latter is proving to be a headache for the bulls so far. Because if in appearance, the price of ETH has been stabilizing for a few months, it is clear that it does not erase the losses of the last wave of correction of last year.
Nevertheless, in monthly units, it trades above the Tenkan. Better still, the position of prices and that of the Chikou Span in relation to the Kumo (Ichimoku Cloud) remain favorable. Could these signals allow us to cross a decisive course? For now, this month’s candle does not show a real desire to cross $1700.
In the interest of the bulls, Breaking through this resistance would save us a lot of trouble over the next few months. With the prospect that it completely makes up for the losses of last June and half of last May. Which would coincide in parallel with a Chikou Span that would not sink under the previous courses of the prince of cryptos.
Conversely, a failure below $1700 would not constitute an immediate disaster. However, let’s try to prevent the bears from resurfacing as they approach $1200. Because, we could fear a resumption of a new wave of correction in the near future.
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Ethereum in weekly units – The specter of another failure below $1700
Ethereum narrowly missed out on its five-week run to the upside. And this is no coincidence. Indeed, despite a quotation above the Tenkan and the Kijun, it stalled below $1700. As if the bulls fatally feared yet another failure below this puzzle level. Unfortunately, this potentially negative signal does not come at the right time.
On the one hand, the final crossing of the descending line would be far from a foregone conclusion. And on the other hand, the status quo of ETH price and the Chikou Span below the Kumo in weekly units could stretch further. Basically, we would risk delaying the progress of Ethereum inside the Ichimoku cloud.
In this sense, the bulls must hope for a consolidation in the right order. On condition that the courses can rely on the support of the 1400$ close to the Tenkan. In which case, we would reinforce the probabilities of crossing $1700 for good with a view to integrating the Kumo and going up towards $2300.
Conversely, a new failure under $1700 (the fourth since last August) accompanied by a breakout of $1400, would bring the prince of cryptos back to his past failings. This would provide the opportunity for the bears to eventually push down $1200 to target last year’s lows, not far from $1000.
Ethereum in daily units – Prices still above the Tenkan
In daily units, the price of Ethereum, for a time in decline, experienced a slight jump on contact with $1,700. Unfortunately, the bulls failed to seize this chance to get rid of this resistance which prevents them from looking up. From this observation, the scenario of an extension beyond $1700 is currently postponed.
However, the fact that the price of ETH and the Chikou Span are still above the Kumo, would maintain this hope. But it would be imperative that the courses persist in staying above the Tenkan. A throwback on the most volatile Ichimoku curve would put the bulls in an ideal position with the objective of tickling the symbolic bar of $2000.
On the other hand, if the prince of cryptos were to break the Tenkan, we will have no illusions about the holding of the Kijun. With the risk that it quickly returns towards $1400, not far from the lower limit of the Kumo, the Senkou Span B (SSB). This would simultaneously correspond to a Chikou Span soon sliding below previous prices.
In summary, Ethereum is once again facing the psychological barrier of $1700. And as we speak, bulls prefer to signal their absence when approaching a key level. And as long as the price of the prince of cryptos remains pegged below the Kumo in weekly units, there will be no reason to consider a possible neutralization of its bear run since its last ATH in November 2021.
Not only do bulls lack fundamental catalysts to rely on. Especially since the uncertainties regarding inflation have hardly changed. But the doubts with regard to a monetary reversal of the FED return to the gallop. And although risky asset classes have done relatively well, the US central bank is dithering on the ability of inflation to quietly come down to 2%.
Therefore, if the nightmares of 2022 were to suddenly reawaken via a simultaneous rise in the dollar and bond rates, that is to say that Ethereum (or cryptocurrencies at large) would experience new headwinds. With the apprehension that its bear run will complete its terminal phase with prices at three units in 2023. Unless it manages to extricate itself from its correlation to risk aversion.
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