Ethereum Rally Analysis: Is a Continuation in Sight?

Understanding Ethereum’s Recent Billion-Dollar Profit Rally and the Potential for Continuation

Over the past month, Ethereum (ETH) has delivered billions in profits to investors, staging an impressive 56% rally. Let’s delve into whether this rally is poised for further continuation or if a correction is on the horizon.

Ethereum’s Aggressive Growth and Potential Slowdown

The aggressive upward trend of Ethereum may come to a halt as the bull market reaches a saturation point. It’s expected that the price of ETH will start to decline as the market cools down.

Ethereum Confirms Market Peak

In the last month, the world’s second-largest cryptocurrency surged by 56%, soaring from $2500 to $3921 at the time of writing.

Currently, Ethereum is within 18% of its all-time high of $4626, indicating that the market has likely reached a local peak. A market peak signifies the highest level reached by asset prices or indices before subsequent declines. It often signals a transition from bullish sentiments to potential downtrends or corrections.

This market peak is evident when over 95% of the circulating supply of an asset is in profit, and at present, this metric for ETH stands at 97.5%. The last time such an event occurred was in November 2021 when the token hit its previous all-time high. This suggests that a price decline may be imminent.

Ethereum Supply in Profit. Source: Glassnode

Furthermore, technical indicators are also turning bearish, confirming the end of the bull run. The Moving Average Convergence Divergence (MACD) indicator on the daily chart is on the verge of forming a bearish crossover, with the histogram likely showing red candles in the coming days.

Ethereum, RSI, and MACD. Source: TradingView

The Relative Strength Index (RSI) tells a similar story. It is currently retreating from overbought territory, indicating waning bullish sentiments.

Read also: Everything You Need to Know About the Ethereum Denouement Upgrade

ETH Forecast: Resistance Turned Support Block

Ethereum is trading above a three-year resistance block between $3582 and $3829. The price is likely to break through this block and test the 50% Fibonacci level at $3582.

If profit-taking is strong and the cryptocurrency continues its downturn, a potential drop of 14% to $3336 may occur. This would bring Ethereum back to its price at the beginning of March.

1-Week ETH/USDT Chart. Source: TradingView

However, the upper boundary of this resistance block coincides with the 61.8% Fibonacci level, known as the support level of the bull run. If ETH remains above it, it may attempt to set a new all-time high again. This would require a price increase of 17.93%, rendering the bearish scenario untenable.

For the latest cryptocurrency news, analysis, and forecasts, join our Telegram channel. Subscribe now to stay informed about all the important updates.