Ethereum (ETH) set a swing high at $2,140 in April. Since then, the largest altcoin by market capitalization has neither revisited the 2023 high nor closed above the $2,000 mark, but recoiled above the $1,800 support level.
Short-Term Consolidation For Ethereum?
Ethereum price has been consolidating above the $1,800 zone, oscillating above and below the 100-day Simple Moving Averaged (SMA) while the 50-day SMA provides dynamic support.
The daily Bollinger Bands (BB) added credence to Ether’s consolidation. This was illustrated by the squeezing of the Bollinger Bands, indicating decreasing price volatility.
Moreover, the horizontal flattening of the moving averages validated this sideways price movement. The Relative Strength Index (RSI) were leveling out, an indication that the token was on sideways price action. Furthermore, the RSI was typically in mid-range at around 52, which suggested that the buying and selling pressures were balancing out as the price volatility decreased.
ETH/USD Daily Chart
Going forward, traders may expect ETH price to make a run for the $1,986 range high and collect the buy-stop liquidity resting above it. This move would constitute a 6% rise from the current price and was likely where the short-term upside was capped.
In a highly ambitious case, Ethereum could rally to reach the year-to-date (YTD) high of $2,140. Overcoming this barrier would open the way for a rise toward the $2,500 psychological level. This would bring the total gains to 33%.
On the other hand, if the proof-of-stake (PoS) token produces a daily candlestick close below the $1,800 foothold, there is a good chance it would fall into the hands of sellers. In such a case, the price of the Layer 1 token would most likely drop to revisit the 200-day SMA at $1,713.
In the worst case scenario, ETH could breach the support provided by the 200-day SMA to revisit the $1,622 local low or retrace the $1,500 major support level.
This could give bulls an opportunity regroup, buy the dip and to stage a comeback. However, a daily candlestick close below the aforementioned level would create a lower low, invalidating the upward thesis.
