The price of Ethereum (ETH) has recently surpassed $2,440 per token, reaching a new high for 2023. Surprisingly, Bitcoin (BTC) did not mirror this bullish sentiment, hovering around the $43,000 level for the past five days. So, what has been fueling the growth of ETH/USD from a fundamental perspective? While there is no clear trigger in the media, we can only make informed assumptions:
– Market participants may view ETH as an undervalued asset compared to the surging Bitcoin and Solana.
– Buyers could be anticipating that after the expected approval of Bitcoin ETF applications, the focus will shift towards an ETH ETF.
– The festive spirit and positive sentiment surrounding the Santa rally might also be contributing to Ethereum’s rise.
From a technical standpoint, the price of ETH/USD surpassed the balance period labeled as “B,” where the forces of supply and demand were previously balanced. The bullish momentum has been maintained, with upward movement beyond the $2,333 level attracting followers and causing short sellers to suffer losses. On-chain analytical platforms reported that during the peak of growth, around $14 million worth of bearish positions were liquidated on cryptocurrency exchanges, leading to a short squeeze to some extent.
What lies ahead for Ethereum’s price? Can it establish a new balance period labeled as “C” above the previous period “B,” similar to the trend from “A” to “B”? On the 4-hour chart, a bearish engulfing pattern is forming, which might result in a false breakout of the previous top on December 9, when the SHS pattern was formed. This development of events is not very optimistic. However, as long as the price remains above the $2,333 level, there are reasons to believe that the market is en route to forming a new balance period “C” above the “B” balance level, much like what occurred with the $2,110 level.
A bearish breakdown of the $2,333 level and a return to the “B” balance zone would be a cause for concern, signaling that buyers have lost strength and potentially leading to a downward breakdown of the “B” level.
The price of Ethereum has surged to new heights, surpassing $2,440 per token in 2023. While Bitcoin’s price has remained relatively stagnant, ETH/USD has experienced upward momentum. The factors driving this growth could be its perceived undervaluation, hope for an ETH ETF following the expected approval of Bitcoin ETF applications, and the positive sentiment surrounding the Santa rally. From a technical perspective, Ethereum’s price has moved beyond a previous balance period, with on-chain data showing significant liquidation of bearish positions during the peak of growth. Looking ahead, a bearish engulfing pattern might indicate a false breakout, but as long as the price remains above $2,333, there is reason to believe that a new balance period “C” above the previous “B” level could form. However, a bearish breakdown below $2,333 would be a concerning sign, suggesting weakening buyer strength and the potential for a downward breakdown. It’s important to note that this article represents the opinion of the Companies operating under the FXOpen brand and should not be taken as an offer, solicitation, or financial advice.
Leave a Reply