You know what they say, the higher you go, the bigger the crash, well, cryptocurrencies are no different. It’s obvious that Ethereum price has seen a huge surge over the past month and especially the last week. A 30% price surge after a 65% surge with basically no consolidation is simply not sustainable.
Unfortunately, on the way up, Ethereum hasn’t been able to set any sort of support levels which means that when it sees a pullback, it will be big. In fact, historically, Ethereum has seen the biggest pullbacks right after huge price surges.
The last one happened back in September 2019. Ethereum saw a 36% price surge starting September 6 and peaked at $223,94 on September 19. Only one day later, the digital asset experienced a massive 33% crash in just 5 days, taking Ethereum’s price to lower levels than before the mini bull run.
Something eerily similar is currently taking place but even more pronounced. Ethereum has seen 13 green candlesticks over the last 18 days and has set barely no support levels on the way up.
Ethereum Price Needs to Consolidate
Nothing goes up in a straight line. Ethereum will clearly remain in a daily uptrend for a while as the bulls could see a 20% drop and still be ok, in fact, it would be considered healthy.
Currently, the daily RSI is extremely overextended at 85 points, however, an even bigger problem is the weekly RSI which is also overextended at 70 points, the highest level since January 2018, when the crypto market bull run was taking place.
Furthermore, Ethereum price was right on top of the 0.618 Fib retracement from the last weekly high at $366. It currently seems that the bulls were unable to keep ETH above $272 as too many factors were against them.
Ethereum is Definitely Bullish in The Long Term
That being said, Ethereum is clearly bullish in the long term after blasting through 3 weekly resistances in just one move with increasing bull volume. As stated above, ETH could see a 20-30% pullback and still be totally ok.
In fact, it would probably take a move down to $170 or lower for the bulls to start being concerned as the last weekly low is all the way down at $116,26, so anything above that level would simply be a higher low. Additionally, the 12 and 26-period EMAs have crossed bullishly on the weekly chart and the monthly is looking to confirm an uptrend in the next few months.
As Ethereum upgrades keep pouring in and the whole cryptocurrency market is shifting towards a bullish sentiment, the digital asset will continue to be extremely bullish.
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