In recent weeks, Ethereum has shown a downward trend in shorter time frames, where the bulls struggled to hold the $1900 critical support zone. This allowed the bears to gain dominance. However, there appears to be a change in price sentiment in recent trading sessions.
On the daily chart, ETH was up 2%. Positive movement can be observed on the weekly chart, although it remains relatively modest.
Despite the upward movement, there is a potential risk of declining bullish momentum if Ethereum fails to maintain its price above the immediate trading zone. From a technical point of view, the altcoin is trending towards bullishness, with increased buying power visible in recent trading sessions.
Both accumulation and demand have played a role in this positive shift. In addition, Ethereum’s market cap has been growing, indicating increased demand over the past trading sessions.
At the time of writing, ETH was priced at $1,840. It is currently approaching its immediate resistance level of $1,850, which previously acted as a liquidity pocket.
Approaching this level can lead to a price drop. However, if the altcoin successfully crosses $1,850 and establishes a trading position above the subsequent resistance at $1,870, it could signal an extended period of bullish activity.
On the downside, the support level is at $1,780 followed by another at $1,760. Falling within this range can lead to further downward movement in the price.
ETH trading volume in the previous session was lower. However, the fact that it was in the green indicates that buyers gradually entered the market.
Technical analysis
In terms of buyer activity, there is increased demand for the altcoin after a notable dip in the past 48 hours. The Relative Strength Index (RSI) climbed above 60, signaling a rebound in the altcoin and a signal that buyer engagement has outpaced seller activity.
In addition, the price remained above the 20-Simple Moving Average (SMA) line, indicating that buyers were the driving force behind the market’s price momentum.
Another observation is that ETH remained above the 200-Simple Moving Average (SMA) line (green). This suggests that a significant price increase can be expected before the bullish momentum wears off.
Correlating with the increase in demand, ETH showed buy signals on the daily chart. The Moving Average Convergence Divergence (MACD), which indicates price momentum and potential shifts, showed green histograms aligned with buy signals.
These buy signals also suggest a possible upward movement in the price during the subsequent immediate trading sessions.
In addition, the Bollinger Bands appeared wide apart, indicating the likelihood of price volatility, although not overly significant as the bands remained largely parallel. These parallel bands coincide with the immediate resistance level.
Featured image from Unsplash, charts from TradingView.com