Ethereum’s price has exploded higher over the past week, surging over 15% to break above the key $2,000 level. This marks the first time ETH has traded above $2,000 since April 2023, signaling a potential trend reversal for the second largest cryptocurrency.
The registration of an Ethereum Trust by BlackRock, a $9 trillion asset manager, in Delaware has been a significant factor in driving up the value of Ethereum. This move by BlackRock is seen as a major endorsement for Ethereum, potentially attracting a wave of institutional investors to the cryptocurrency.
JUST IN: 🇺🇸 $9 trillion asset manager BlackRock registers Ethereum Trust in Delaware.— Watcher.Guru (@WatcherGuru) November 9, 2023
After breaking out from a falling wedge pattern, Ethereum staged a powerful rally that allowed it to smash through the $1,800 resistance area as well as the 200-day moving average. This breakout indicates bulls have regained control of the market after months of bearish pressure.
The recent price action has turned the short-term and medium-term trends bullish for ETH, although the long-term trend remains in a downtrend. Momentum indicators like the MACD have ticked higher into bullish territory, but are showing signs of waning, suggesting the crypto may be due for a pullback or consolidation around $2,000 before continuing higher.
One indication that Ethereum may be overbought in the short-term is its Relative Strength Index (RSI) reading above 80 on the daily chart. The RSI is a momentum indicator that measures the speed and rate of an asset’s price movement. Readings above 70 generally indicate overbought conditions, while levels below 30 signal oversold.
Ethereum’s daily RSI surged to as high as 83 during the recent breakout, its highest level since 2021. The last two times ETH’s RSI hit these elevated levels in early 2021 and mid-2022, a significant pullback followed.
While high RSI readings can persist in strong uptrends, the current extremely overbought conditions suggest Ethereum could see a cool-off in the coming days. The key support level to watch is the breakout point near $1,800. As long as bulls can defend this area on any pullbacks, the uptrend should remain intact.
While Ethereum’s push above $2,000 is no doubt an exciting development for bulls, it may be too early to call this the start of a true “altcoin season.” ETH remains well below its 2021 high near $5,000 and has significant resistance around $2,400. A sustained move above that level would signal the crypto bull market is back in full swing.
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