Ethereum price breaks out of the descending resistance line. ETH May Be Bullish Ahead of Shanghai Update. Price recovery above $1,650 could accelerate growth
There has been optimistic news coming from the Ethereum ecosystem lately. So, at the opening of this week, it became known that the emission of ETH again fell to deflationary values.. The current supply of coins is about 120 million ETH tokens, which is 2000 times less than at the time of the release of Ethereum 2.0 in September 2022.
Earlier, BeInCrypto also revealed that ETH developers are planning to release a public testnet for the Shanghai update by the end of February, with the long-awaited ETH withdrawal available in March.. Perhaps these messages also contributed to the growth of bullish sentiment towards Ethereum.
See also: How the Shanghai update will affect the withdrawals in the Ethereum network
Long awaited bullish breakout of ETH
As the results of technical analysis show, the coin rate has been growing at an accelerating pace since the beginning of the year.. On January 11, the price broke through the $1350 resistance area and the descending resistance line that has been present on the chart since August 2022. As a result, Ethereum peaked at $1611.
Key resistance area now at $1660. This is the Fibo level 0.618 correction and the area of horizontal resistance. A breakout of this zone could push ETH to $2,000. Meanwhile, support in case of a decrease is located in the region of $1350.
Source: TradingView Wave analysis promises growth above $2,000
Wave analysis results support bullish price momentum. They suggest that Ethereum may be in an extended wave 3 (black) of a five-wave bullish structure right now.
Sub-wave analysis is shown in red on the chart.. According to its results, ETH is now correcting inside sub-wave 4. The most likely level to complete the wave is $1440 (Fibo level 0.382 retracement, red). This is due to the fact that the fourth waves are quite often shallow.. If this is true, then the price may reach this area in the next 24 hours.
Accordingly, a decline below $1340 (Fibo level 0.618 retracement) will make this scenario unlikely, and absorption of the high of wave 1 at $1244 will completely cancel it.. In this case, we can expect the price to fall below $1200.
Source: Trading View
Longer-term wave analysis suggests ETH is trading inside a bullish ABC corrective structure (white). The five-wave structure described above forms wave C within this pattern.
An AC wave ratio of 1:1 will give us a high of Ethereum at $2241.
Breakdown of the $1650 resistance area and its transformation into support will confirm the correctness of our assumptions.
Source: Trading View
Thus, the most likely scenario for ETH promises the market growth in the direction of $2240. Drawdown below $1244 cancels this forecast. In this case, Ethereum could collapse below $1000. However, the launch of the Shanghai update is expected to be able to support the cryptocurrency’s bullish momentum.
Earlier, the editors of BeInCrypto said that Bitcoin (BTC) took important technical milestones, but became overbought.
All information contained on our website is published on the principles of good faith and objectivity, as well as for informational purposes only.. The reader is solely responsible for any actions taken by him on the basis of information received on our website.