Last week we said:
The market is teetering on a knife’s edge, but the constant downward spiral has stopped – for now at least. ETH found support above $2k and again at $2300. However, market weakness means that ETH will continue to move with BTC for now.
ETH’s performance has exceeded expectations over the past week, outperforming the market and rising 16.2% over the past 7d compared to BTC’s 1% gain. ETH broke the $2500 4H 50 SMA resistance from last week and is now testing the $2800 historical support/resistance zone.
Let’s take a look at the charts and see if we can identify support and resistance zones for the week.
Ethereum Price Analysis
An important bullish divergence can now be seen on lower timeframes. Last week we identified that the 4H 50 SMA was acting as resistance (as indicated by the red arrows above) and would be an important test of resistance over the past week. After breaking through the resistance zone, ETH had two retests of the 4H 50 SMA, which flipped to support (shown by the green arrows). This is an important change that shows a changing tide, and a classic resistance -> support flip. This support is around $2600.
In the above chart, we can also see that the 4H 50 SMA is about to cross the 4H 100 SMA, and the price is moving up to test the 200 SMA (yellow line). I expect the 200 SMA to act as resistance this week around the $3k zone.
The RSI and Stoch look overextended in this time frame, so ETH may need to consolidate further before breaking $3k.
Looking at the daily chart, ETH is now testing the price zone that acted as a bottom in September ‘21. This means it is testing a historical support zone (that will now act as resistance). The number to watch here is $2800.
ETH is still well below all moving averages at this level, with the Daily 50 SMA at $3300.
The RSI is neutral but Stochastic is overextended – so we are seeing mixed signals here.
We may actually see a green candle soon on the weekly, as it appears bears are losing momentum. Deep supports at the weekly 100 SMA and 200 SMA are still present at $1.7k and $1k, respectively. The weekly 50 SMA coincides with resistance at the 4H 200 SMA – currently at $3k.
Ethereum Investor Sentiment
The ETH fear/greed index is still “fearful” but not “extreme fear” as it was last week. Still, plenty of room to go before greed is restored!
Ethereum Fundamental Analysis
Network demand has dropped somewhat from last week but remains fairly strong. Over 84% of emissions over the last 7d have been burned due to transaction fees, only inflating the supply by 14,572 ETH in that time period.
Ethereum’s DeFi TVL is beginning to rebound after finding a local low in late January but still has to recover about $60B to return to all time highs.
Conclusion
There is clearly a shifting tide from bearish to bullish for ETH. This is confirmed by resistance zones flipping to support zones. If ETH can break $2800, a test of $3k is likely. If not, a return to $2600 is likely.
Support Zones
- $2600 (4H 50 SMA)
- $2300 (local)
- $2k (psychological)
- $1700 (Weekly 100 SMA), Historical
- $1k (Weekly 200 SMA)
Resistance Zones
- $2800 (local)
- $3000 (4H 200 SMA, Weekly 50 SMA)
- $3300 (Daily 50 SMA)
Not investment advice. Do your own research.
