Ethereum (ETH), the second-largest cryptocurrency, has encountered increased selling pressure during its recent recovery, resulting in a 7.8% decline over the past 5 days. The price pulled back from the $1,745 supply zone, raising questions about whether this is a brief setback or the beginning of a more significant downturn. Let’s delve into the analysis to understand the potential outcomes for ETH’s price.

Ethereum’s Recent Rally

Ethereum embarked on a relief rally in the second week of September, displaying higher highs and higher lows over the course of a month. This pattern indicated bullish sentiment supporting the resurgence of ETH’s price. Additionally, a daily chart analysis reveals the presence of an ascending trendline that has consistently provided dynamic support during this rally. Each retreat to this support trendline has witnessed a swift bullish response.

As of the current analysis, Ethereum’s price stands at $1,640, and the coin appears to be approaching the lower trendline once more. The critical question is whether buyers will defend this level. If they do, we could anticipate a 7.75% upswing, targeting the resistance at $1,745.

Key Levels to Watch

Breakout from $1,745: A bullish breakout from the $1,745 level could set Ethereum up for a quick 7.5% jump in price. Such a move would underscore a strengthened bullish sentiment, potentially propelling ETH towards $1,877, followed by the psychologically significant $2,000 mark.

Bitcoin vs. Ethereum: Comparing the price performances of Bitcoin (BTC) and Ethereum (ETH) over the past two months reveals that Bitcoin has outperformed Ethereum. During its recent recovery, the BTC price surpassed its previous swing high at $27,361, while the ETH price struggled to overcome its analogous peak at $1,713. This discrepancy suggests that Ethereum may be experiencing more lateral movement.

Moving Average Convergence Divergence (MACD): The MACD and signal lines converging near the midline reflect a neutral stance from market participants. This suggests that market sentiment is currently uncertain, and Ethereum’s price could go either way in the short term.

Exponential Moving Average (EMA): The daily 100 and 200 EMAs wavering around the $1,735 mark increase the overhead supply pressure for Ethereum’s price. These EMAs serve as resistance levels that may challenge the coin’s upward momentum.

Conclusion

Ethereum’s recent pullback from the $1,745 supply zone has raised questions about the future direction of its price. The presence of an ascending trendline on the daily chart suggests that buyers have consistently defended this support level during the recent rally. If this trendline continues to hold, Ethereum could see a bullish breakout and target resistance levels at $1,877 and $2,000.

However, the comparison between Bitcoin and Ethereum shows that Bitcoin has exhibited stronger price performance in the past two months. Additionally, the MACD’s neutral stance and the presence of EMAs as resistance levels indicate that Ethereum’s price faces challenges in its path to recovery.

In conclusion, Ethereum’s price trajectory remains uncertain, and traders and investors should closely monitor key levels and market dynamics to make informed decisions in this evolving cryptocurrency landscape.