Ethereum (ETH) – Could experience some bearish corrections despite the strong bullish tone
Posted on Sunday, July 24 2022 at 8:56 pm GMT+0000
Ethereum (ETH) has been outperforming over the last couple of weeks, but recently paused the ascent in the proximity of the 2/1 Gann fan angle.
After molding a strong foothold some distance beyond the mid-June bottom at 880, the price jumped over the July 8th high at 1275 and upgraded the medium-term outlook to positive. The recent bullish intersection of the 20- and 40-day exponential moving averages is sponsoring the newly confirmed bullish mode.
Technically, there is room for additional improvement in the forthcoming sessions as the KST indicator is climbing beyond its signal and zero line, while the +DI and -DI of the ADX indicator are positively aligned with the indicator itself stretching north of the 20 mark, hinting at strong up-trending characteristics.
The second largest cryptocurrency by market cap is actively re-testing the aforementioned Gann angle, where a decisive penetration and more importantly a jump over the neighboring May 12th low at 1,701 will boost buying interest towards the late May inside swing high of 2,015 ahead of the May 15th high at 2,164.
However, with the market entering a strong restrictive zone, following a sturdy rally, some profit-taking would be normal in the next few sessions, particularly given the IMI’s prolonged presence in the overbought territory.
So, if the positive impetus starts to wane, the price will initially seek shelter around the simple moving averages and the 1,275 barrier which proved a strong resistance bar between late June and early July. A significant drop below these barricades will critically dampen the positive prospects and shift attention towards the June 30th low at 997 and the June bottom at 880.
In brief, although Ethereum is still exhibiting a strong bullish bearing in the medium-term picture some bearish corrections cannot be excluded. Buyers should endorse this possible correction lower and wisely wait for clear signs of stabilization around the 1,275 hurdle in order to instate fresh long positions. Only a decisive move beyond 1,701 could shrug that scenario and reinforce positive tendencies immediately.
