ETH Bulls Target $2,000, but Could a Revisit of $1,800 Occur First? (Ethereum Price Analysis)

Ethereum’s price recently found support at the 200-day moving average and subsequently initiated a robust bullish rally, surpassing the 100-day MA. This development may indicate a favorable outlook for Ethereum’s mid-term future, although it also poses the risk of being a bull trap.

Technical Analysis

By Shayan

The Daily Chart

Following a phase of correction and a notable downtrend, the price reached the $1.6K mark, aligning with the 200-day moving average where it encountered support. The considerable buying pressure at this point triggered a swift reversal and an upward trajectory towards the key resistance area near $2K.

Moreover, the price exceeded the 100-day moving average at $1.8K, indicating a bullish inclination for Ethereum in the mid-term. Nevertheless, to validate the existence of a bull market in 2023 and restore adequate demand in the market, Ethereum’s price must still navigate the significant resistance at the $2K level and establish consolidation above it.

Source: TradingView

The 4-Hour Chart

Generally, the Fibonacci retracement tool is effective for pinpointing potential reversal points and correction targets during impulsive trends. As noted earlier, Ethereum’s price underwent a mid-term correction phase after reaching the yearly peak of $2.1K through an impulsive uptrend.

An analysis of the chart shows that the bearish correction leg found support and reversed at the 61.8% retracement level, a frequently observed target during correction phases. The prevailing buying pressure within this crucial range led to a strong bullish trend towards the $2K area.

If the price successfully breaks through the significant resistance around $2K, it will set the stage for a mid-term bullish trend, as this level carries psychological importance. However, it is important to note the bearish divergence between the price and the RSI indicator, which implies the potential for a minor rejection and short-term consolidation before Ethereum proceeds with its next move.

Source: TradingView

On-chain Analysis

By Shayan

Ethereum has been consolidating below the $2K threshold for several months after facing rejection at that level. The uncertainty observed on the price chart is mirrored in the sentiment of the futures market.

This chart illustrates the Funding Rates metric, which reflects whether the sentiment in the futures market is bullish or bearish. Recently, following a correction in the market that coincided with a downtrend in the funding rates metric, the price found support and commenced a vigorous rally.

However, the metric has begun to exhibit a slight upward trend during this bullish rally, indicating heightened buying pressure and a greater inclination among participants to adopt long positions rather than short ones.

While this may be interpreted as a bullish signal for the market, traders should remain vigilant as it could potentially represent a bull trap, leading to a long-squeeze event.

Source: CryptoQuant

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Cryptocurrency charts by TradingView.