Following a surge in its price, Ethereum (ETH), the popular cryptocurrency, is speculated to rally towards the $2K mark, although experts warn of resistance levels that could impede this upward trend.
Ethereum’s price showed a marked increase after a long consolidation stage around the $1.6K support level. The price of the cryptocurrency spiked towards the 100 and 200-day moving averages, identified at $1765 and $1805 respectively. These averages, earlier underperformed by Ethereum due to strong selling pressure, now serve as formidable resistance levels.
If the price is rebuffed within this range, it might indicate a legitimate pullback, possibly leading to another slump towards the $1.6K support level. On the other hand, if Ethereum’s price successfully penetrates this key region, it could ignite bullish sentiment and stimulate further market appreciation.
The 4-hour chart analysis suggests a positive sentiment among Ethereum traders, hinting at potential future market behavior. However, the recent price surge has brought Ethereum near a crucial resistance zone, including the static resistance at $1.8K and the dynamic resistance of the upper boundary of the extended descending wedge.
This resistance area might block the current upward rally due to increased selling pressure. Conversely, if the price overcomes this critical range, it would be advantageous for Ethereum buyers, possibly triggering a surge towards the $2K resistance level.
Despite the potential for upward market movements, traders are urged to tread carefully. High readings might be accompanied by significant liquidations that could lead to unforeseen market drops. Traders are encouraged to keep a close watch on these significant levels to make informed market decisions.