- Ethereum price is trading range-bound near $1,700, up 42% since Jan 1.
- The bulls could prompt a surge toward the mid-$1,800 liquidity zone.
- Invalidation of the bullish thesis would occur below $1,580
Ethereum price has been consolidating within an overall uptrend, but there are signs of a potential trend reversal. Traders should exercise caution and implement effective risk management strategies before entering any trades on the ETH price.
Ethereum price is cooling down
Ethereum price is trading range-bound, giving traders time to consider which side of the market they want to join. The bulls have enjoyed six weeks of bragging rights as Ethereum is up 42% since January 1. However, the bears are showing credible evidence to believe a countertrend move is near.
Ethereum price is currently trading at $1,684, as the bulls are experiencing resistance near the $1,700 zone. The Relative Strength Index (RSI) shows a bearish divergence with previous upswings near the $1,700 barrier and the mid-$1,600 zone’s highs that occurred earlier in the month. The RSI’s divergence suggests the uptrend’s underlying strength is waning,
Still, the uptrend remains intact as there is a compression of both the 8-day exponential moving average and 21-day simple moving averages. Compression usually occurs when an asset is subject to a volatile swing. In this case, since the ETH price is above the compressing indicators, the short-term bias for Ethereum is bullish.
Considering these factors, there is a fair chance that the mid-$1,800 liquidity zone may be tagged in the coming days The bullish scenario creates the potential for a 10% increase from ETH’s current price.
However, the bullish thesis would be invalidated with a tag below the compressing indicators at $1,580. If the breach occurs, the ETH price could potentially decrease towards $1,265 support zone, resulting in af 25% from Ethereum’s current market value.