- Ethereum price completed its refusal over the weekend after hitting the curb.
- ETH has sunk in search of support and there could be room for more.
- If $1,425 holds, the rally could stay put.
We see Ethereum (ETH) price under increasing pressure as profit-taking is accelerated by bulls exiting positions in light of next week’s risk event. With several major central banks set to announce their first monetary policy meetings of the year, traders are gearing up for a cold shower. As inflation remains historically high, a market victory dance is premature and premature, as several central banks recently warned. As long as the 200-day Simple Moving Average (SMA) holds above $1,425, the uptrend will continue, but a break below is a warning sign.
Ethereum Price Still Hits the Rise, But Momentum Is Fading
Ethereum price sees sentiment and enthusiasm among traders deteriorating as the market signals profit taking is underway. The trigger occurred after $1,688 was tested with a firm rejection as the final result. Currently down about 10%, a cooldown in the Relative Strength Index (RSI) and its price action would be welcome, but don’t go any further than necessary.
ETH is poised for balance to see if this rally is strong enough, if it has room to move higher, and if it breaks that $1,688 level to start flirting at $2,000 soon. It looks like you are doing some testing. The upside is still supported, with support granted at $1,512 near the monthly R3 and expected to test $1,688 again and move higher. If that R3 level fails, the safeguard can be found at $1,425 and serves as the last line of defense for this rally before resuming its journey towards $2,000.
ETH/USD daily chart
What is already underlined in the above paragraph is that the balance or fine line of this rally supported is very thin. Downside risk can easily arise with price action below the 200-day SMA. When that happens, we can expect some stops to hit, creating a wave of sell orders, or a flood of sell orders, creating an equilibrium between buyers and sellers. This means that price action will head towards the first $1,315 near the monthly R1 and the 55-day SMA, and then $1,243 for critical level testing from 01-Feb-2021.
