Ethereum (ETH) is currently in an important phase dealing with substantial resistance and the risk of a price decline. The major cryptocurrency is trading at about $3,790, according to CoinMarketCap. A well-known crypto analyst, Morecryptoonl, pointed out that resistance is coming into play at the $3,795 and $3,846 marks, which represent a huge obstacle that might lead to price movement to higher levels.
The chart studies imply that a break below $3,710 might be the start of wave C of 3 down. This wave projection could drive the cryptocurrency towards the lower supports like the $3,567.30 zone and then the 1.236 Fibonacci extension at $3,475.26.
On the other hand, if the price succeeds in breaking above $3,847, it will signify that wave B of Y is in progress. As seen in orange, this will pave the way for the cryptocurrency to reach higher targets such as $4,017.32 and the 1.618 extension at $4,275.46.
Currently, the market is most interested in these levels. To this end, traders and investors will need to take a careful approach to these milestones since they have the potential to determine the next path of action for Ethereum. The degree of the importance of these price levels is manifested by the overlap of both resistance and support levels on the chart.
The possible corrective rally implies that the cryptocurrency may be part way through a larger wave pattern highlighting that the broader trend might still have more room to run. Yet, the short-term focus is on whether Ethereum is going to clear the resistance at hand or there will be bearish pressure emerging consequently initiating a new wave of decline.
Ethereum’s Outperformance Reflects Market Sentiment
Over the past 30 days, Ethereum has surged by 27%, outpacing Bitcoin and other major layer-1 tokens. During the last month, Bitcoin has seen a modest 2% increase, while other top-cap layer-1 tokens like BNB (BNB) from BNB Chain and SOL (SOL) from Solana have risen by around 3% and 1%, respectively.
Analyzing the ETH/BTC weekly chart, there was a bullish divergence in the relative strength index, indicating the start of a trend reversal, according to trader and MN Trading founder Michaël van de Poppe. As long as the ratio remains above 0.051, this ratio is seen as bullish from a technical standpoint.
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