Being viewed as an alternative to the largest cryptocurrency, Bitcoin and Ethereum hold many potentials in the future. Maybe this is why ETH is up by more than 200% while BTC has still not been able to hit a century. The larger discussion and buzz is around the upgrade of Ethereum 2.0.
ETH 2.0 will use the proof of stake technology which essentially takes power away from miners and rewards them as validators for the transaction. On ETH 2.0, the proof of stake is rumored to have a deposit contract that can be sealed if there is a case of malpractice. Irrespective of the news, let us dissect the price action and momentum in Ethereum as of now.
ETH Technical Analysis
Ethereum is still stuck in the consolidation zones. The breakout at the beginning of June 2021 turned out to be a false one. Another important factor to consider is that ETH has broken its 100 days simple moving average line by a significant downtrend. There seems to be stiff resistance around $2700, and it’s also following the broader crypto-market trend.
As of 17th June, ETH is trying to make it back above the 100 DMA, and until then, there is only negativity on this counter. The higher resistance has still not been tested in more than a month, and it’s the same issue with consolidation zones. In the last two occurrences of breaking the 100 DMA, ETH followed a quick and strong buying to push the prices towards resistance zones.
According to this trend, ETH should soon be close to $2850 within the next month or enforce selling pressure. Investors should consider the $2165 levels as a clear stop loss for holding Ethereum at $2420 levels. RSI indicates a neutral sentiment in the market as it holds a value between 40 and 50 for the last three weeks.
Heikin Ashi charts show a positive attempt at retaking the 100-day moving average line. There has been some rally in the last few hours, but the momentum is capped around $2410 levels. The creation of a red candle on this chart with no upper wick is a sign of worry for short time frame traders. ETH is destined to remain weak for the next few hours if there is no significant news in the market.
Taking positions at current levels is cheap. Its 200-day moving average is currently placed around $1800 levels, which is about 30% below the current levels. In an unlikely scenario, ETH could take support from the 200 DMA. Hence, until it crosses above the 100 DMA, it is not wise to take risks.
But, still, as an active trader, if someone wants to invest in Ethereum, it is recommended that first check ETH price prediction by experts and then decide for any investment in this currency. As it’s better to wait for the right time to gain huge returns in the future.