The prince of cryptos not safe from a fatal counter-foot? – Since the price of Ethereum (ETH) managed to cross this cursed resistance of $ 1700, the neutralization of its bear run since its last ATH in November 2021 would seem to have been recorded. With technical signals that would suggest that the bulls would have the situation in hand. And given the current decline in inflation in the United States, everything would potentially lead to a weakening of the FED in terms of its monetary tightening.
However, wouldn’t it be too early to bury the most refractory bears? Because as we speak, all the reasons for the rebound of the prince of cryptos since the beginning of the year remain fragile. Especially since the Fed’s balance sheet is gradually consolidating for the third consecutive week. As if the crisis in the banking sector was only temporary.
In a market context where the VIX (Volatility Index) has fallen below 17 for the first time since the beginning of January 2022, let’s see if the latest technical analyzes of ETH do not in fact show premature euphoria.
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BTC and ETH rebounds – The tree that hides the forest?
Bulls should look in their mirrors. And for good reason, the market capitalization of cryptocurrencies excluding BTC and ETH (TOTAL3), is struggling to reach the 400 billion dollar mark despite crossing the descending line. And if the reality were proven, beware that the rebounds of the two market leaders are not the tree that hides the forest.
Assuming that TOTAL3 reenters the interior of the Kumo (Ichimoku Cloud), the neutralization of its bear run could be compromised. But the courses would have the merit of returning towards the 443 billion dollars of market capitalization. And beyond this resistance we would pass an additional course towards 610 billion dollars in the perspective of getting closer to the altseason.
However, in the event that BTC and ETH fatally fail to cross their next resistance, it will be necessary to give up on the neutralization of TOTAL3’s bear run since its last ATH in November 2021. To the point that a hard return to the reality could happen in the world of cryptocurrencies.
Ethereum in weekly units – Prices finally above $2000
Buoyed by last week’s bullish candle, Ethereum price is settling well inside Kumo. But even better, it just crossed $2000. At the same time, the Chikou Span still below the cloud, makes a rapprochement with respect to the descending line and exceeds the Kijun. These recent signals would support the central scenario of a neutralization of its bear run since its last ATH in November 2021.
In this sense, the bulls would attack $2300. However, things will be more complicated to overcome this key level in the coming weeks. Because precisely, $2300 was the tipping point for the current bear run. And on the other hand, the risk/return would not appear so attractive when approaching a psychological resistance. Especially since the renewed confidence in cryptocurrencies could be misleading given the lack of dynamism of TOTAL3.
As long as prices stumble under this resistance, the non-change of favorable polarity would slow down the progress of the rebound at the start of the year.
Ethereum in daily units – Final exit from the bullish channel from above?
In daily units, things work out nicely. Because by exceeding $2000, the price of the prince of cryptos overflows the bullish channel from above. This keeps prices and the Chikou Span above the Kumo. Even more remarkable, the Ichimoku curve, which replicates the evolution of ETH with a 26-day lag, distances itself from the upper limit of the chart pattern.
Based on this observation in the form of alignment of the planets, the 2300$ would stretch out their arms. Assuming the bounce continues in a straight line to reach the target, the potential movement could be excessive. Below $2000, an unfavorable change in polarity would cause Ethereum price to return inside the bullish channel.
Conversely, a throwback on the $2000 in the next few days, would reinforce the idea of a rebound which would have the potential to last over time. The bulls would give themselves a chance to approach $2300 under better technical conditions. However, all the positive catalysts available are practically included in the courses. And as such, it would not be excluded that the prince of cryptos tempers under this resistance while awaiting the outcome of the next FED meeting.
In summary, although the crossing of $2000 is good news for the bulls, affording the scalp of $2300 may be complicated. Not only is it a major threshold that the bears are watching carefully.
The alert zone which would unfortunately relaunch the race for a possible resumption of the bear run, would occur below $1400. This would follow an exit from the bullish channel from below and coincide with the unfavorable positions of the price of ETH and the Chikou Span below the Kumo in weekly units. In which case, signals like the crossing of the descending line and that of $1700 and $2000 would have actually led the bulls away.
Finally, the return of a VIX below 17 would send the message of an anticipation of a FED which would finally calm the game on its monetary policy. That said, wouldn’t the market be doing too much? Inflation in the United States has certainly calmed down, but it still remains high. So much so that we are not immune to a new wave of increases for more structural reasons. On the other hand, the specter of a recession would not militate for a burst of cryptocurrencies. Because they remain correlated to other risky asset classes. Therefore, expect a return of volatility that could generate serious financial stress.
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