ETH Price Analysis: Low Volume Rally Hints Another Reversal in Ethereum
The ongoing range-bound rally in Ethereum(ETH) price indicates traders are still trapped in uncertainty. In addition, the recent rally has brought the altcoin to overhead resistance($1275), but the diminishing volume activity hints at a bearish reversal. The downfall may plunge the altcoin back to $1000 support.
Key points:
- The ETH price jumps above the 20-day EMA resistance
- The daily-RSI slope entering the bullish territory
- The intraday trading volume in Ethereum is $19.6 Billion, indicating a 39% gain
Source-Tradingview
Since last month, ETH/USDT pair has showcased a textbook example of the consolidation phase, wobbling between $1275 and $1000. The altcoin has thrice tested either side of the barriers indicating aggressive buying and selling on both ends.
Such range-bound rallies serve two purposes: a short break period before the prevailing trend continues or a kickstart of a new reversal rally. Furthermore, this technical set-up with steady barriers gives an excellent entry opportunity.
On July 13th, the ETH price rebounded from the $1000 psychological support with a bullish engulfing candle. The bullish reversal surged 18.3% in just three days, approaching the $1250-$1275 supply zone.
However, this recovery rally backed by decreasing volume indicates losing bullish momentum as the ETH price nears the overhead resistance.
Thus, the expected reversal would continue the consolidation phase for a few more sessions and undermine the recent recovery with a downfall back to $1000.
On a contrary note, if the buyers manage to surpass the overhead resistance, the ETH price would acquire a higher footing to bolster a recovery rally to $1400 resistance.
Technical indicator-
Bollinger Band indicator: the indicator’s upper and lower band is significantly aligned with the range barriers, offering additional weightage for these levels. Thus, a genuine breakout from this range should decide the upcoming rally in ETH.
RSI: throughout the ongoing consolidation, the daily-RSI slope has been rising. This divergence indicates the growing bullish momentum and supports the recovery theory mentioned above.
- Resistance level- $1300, and $1400
- Support level- $1000 and $880
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