The second cryptocurrency in the market, Ethereum, is back above $1600 while the whole market is currently in green following the decision of the Federal Reserve Bank to apply a rate increase of around 0.25%.
So far, Ethereum bulls have been able to defend resistance at $1,600. On the downside, the support at $1,520 must be defended at all costs to avoid a drop to $1,445 or even $1,400.
Over $9 billion in trading volume has been recorded in the past 24 hours, and the price of ETH has increased by around 5.47% over the same period. Its market capitalization which had risen to $192 billion after the weekend liquidations is currently at $204 billion.
Bullish trend for Ethereum price after the FOMC
ETH’s advance has remained relatively flat, and traders are eyeing a retest of January’s high at around $1,678. Investors had been on the sidelines awaiting the FOMC’s decision (Federal Open Market Committee) American. This first meeting which ended late yesterday had the impact of galvanizing the recovery seen in the crypto markets after the New Year.
According to analysis by Lookonchain on ETH price movements after eight FOMC meetings in 2022, investors expected Ethereum price to rise in the range of 4.25%, 0.25% being the smallest expected change.
Ethereum price is now comfortably above the critical support provided by the 200-day exponential moving average (EMA) (in purple) at $1,517. However, the Moving Average Convergence Divergence (MACD) indicator recently showed a sell signal, hinting at a longer trend correction in the coming days.
Traders should follow the position of the MACD line in blue, which builds divergence below the signal line in red. The downward movement may intensify if the momentum indicator falls on the middle line and possibly revisits the negative region. Red histograms of the same indicator reinforce increasing bearish advances.
Ethereum price bullish outlook assessment – short analysis
The cash flow index (Money Flow Index, MFI) on the same daily chart reveals that investors are ready to pour money into Ethereum. We can see the MFI bouncing off the neutral zone midline after a significant dip from the upper zone of the overbought region. As long as the inflow volume is greater than the outflow volume of ETH, a rebound is the most likely outcome.
In addition to the support provided by the 200-day EMA, the 50-day EMA (in red) has recently moved above the 100-day EMA. While this is not a golden cross pattern (which forms when the 50-day EMA crosses above the 200-day EMA), it does imply that the bulls are holding the reins and that the price of Ethereum will likely continue to climb.
Short-term analysis based on the four-hour chart shows the cryptocurrency holding between the 100-day EMA (in blue) and the 50-day EMA (in red) on the upside. Although ETH is trading below the dotted trendline, its support at the 100-day EMA has been reinforced by the lower rising trendline, favoring a bullish outcome.
After falling from its January highs, Ethereum tipped into the oversold zone according to the stochastic oscillator. However, the recovery is underway with bullish pressure gradually intensifying.
Therefore, with a slight push above the 50-day EMA and the dotted ascending trendline, Ethereum price would resume its uptrend, and could target $1,800-$2,000. The MFI indicator confirms the positive picture, as shown by the analysis of the daily time frame.
It would be prudent to assess the possibility of an extended trend correction, particularly if the 100-day EMA support on the four-hour chart weakens. From there, Ethereum will be forced to turn to the 200-day EMA (purple) at $1,486 for support. If the situation deteriorates, the bears could retest the buyers’ next congestion zone at $1,400.
Can this upgrade maintain the uptrend of Ethereum price?
The merger paved the way for the deployment of many highly anticipated features on the proof-of-stake (Pos) blockchain, including Zhejiang, the dedicated staking testnet going live today. Users will, for the first time, interact with the new protocol which allows the withdrawal of ETH blocked in staking.
According to the developers, the Shanghai+Capella upgrade will be triggered in about six days from today. The testnet will allow developers to monitor the withdrawal process and other related services and troubleshoot any potential issues that may arise.
The Ethereum community is waiting with bated breath for the launch of the Shanghai Upgrade, expected before the end of Q1 2023. This will be a notable hard fork as it will see, for the first time, investors withdrawing ETH blocked on the Beacon chain.
Experts believe the event will be a significant catalyst for Ethereum’s price and liquid staking platforms that allow investors to lock digital assets into smart contracts while still giving them access to their liquidity, such as LidoDAO.
The Shanghai upgrade will also open up opportunities for organizations and crypto exchanges that could use the staking feature to generate more revenue. According to a recent report by JP Morgancompanies like Coinbase could unlock a $500 million annual revenue opportunity with the launch of the Shanghai upgrade.
Overall, Zhejiang will mark a new beginning for the entire Ethereum ecosystem and trigger a possible rise in the price of ETH.
Other alternatives to Ethereum
Investors can consider diversifying their asset portfolios with other high-potential crypto projects besides ETH.
We’ve reviewed the top 10 cryptocurrencies for 2023, as analyzed by the Expert Opinion team at CryptoNews.
Disclaimer: The Expert Opinion section features the views of crypto industry players and is not part of the editorial content of Cryptonews.com.
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