Ethereum: Improved sentiment can see ETH bounce back to…

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Over the last five days, Ethereum [ETH] broke into a high volatility phase after its two-week squeeze near the $1,700 level. The ongoing pullbacks have substantially impaired the buying ability in the current market structure.

The implications of the recent macroeconomic setbacks have fueled the already-existing fear sentiment in the market. The fall below the $ 1,093 level has pulled ETH to its January 2021 lows.

A potential rebound from this support could help the alt to inflict a near-term recovery. At press time, the alt was trading at $1,063.6, down by 11.05% in the last 24 hours.

ETH Daily Chart

Source: TradingView, ETH/USD

ETH’s Bollinger Bands (BB) have exhibited a one-sided bearish control while the price steeply hovered into its lower band. The altcoin has not been able to indicate any early signs of a robust trend reversal.

Since early April, the bears have kept the price below the basis line of BB while constantly finding fresher multi-month lows. ETH lost nearly 70% of its value in the last 65 days. It was trading just above its 17-month low at the time of writing.

Should the $1,012 support trigger a near-term buying comeback, it could give the bulls a much-needed short-term push toward the $1,218 zone. Also, the exceedingly oversold readings could blend well with the comeback narrative.

A rebound from the immediate support can help the bulls retest the $

1,200 zone. Post this, the two-month trendline resistance would continue to pose barriers. But owing to the broader sentiment, an extended devaluation below the $1,012 level would put ETH in an undesired price discovery mode.

Rationale

Source: TradingView, ETH/USD

The Relative Strength Index (RSI) coincided with the price action to display a one-sided bearish market. As the index plunges to its record low, it could be reasonable to assume a revival from this zone in the days to come.

But with the Aroon up and down indicators hitting their respective oversold peak readings, the buyers still had a long way to change steer the trend in their favor.

Conclusion

The bulls needed to step in to ramp up the buying volumes at the $1,012 support region to prevent a downside price discovery.

Any improvements in the overall sentiment can help ETH’s efforts to bounce back toward the $1,250-$1,300 range.

Finally, investors/traders need to watch out for Bitcoin’s movement. This is because ETH shares an approximate 65% 30-day correlation with the king coin.

https://ambcrypto.com/ethereum-improved-sentiment-can-see-eth-bounce-back-to/

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