Ethereum has shown a tumultuous pattern of price fluctuations, initially dropping below the $3,000 mark in recent days before bouncing back above it.
This price movement has drawn interest from both traders and investors, with the asset gaining 1.4% in the early hours of Friday. This resurgence marks a critical juncture for Ethereum as it aims to sustain its upward momentum above this significant price threshold.
Examining the chart patterns of Ethereum and the overall sentiment in the market
In the midst of these fluctuations, seasoned trader Peter Brandt shared his insights on Ethereum's current price chart via the social media platform X, sparking discussions within the trading community.
Brandt's analysis of Ethereum's price chart identified two potential patterns – a flag and a channel. Initially, he viewed the formation as a flag, typically seen as a continuation pattern occurring during temporary pauses in dynamic market trends. However, after further examination, he suggested that the pattern might better resemble a channel.
A channel is characterized by two parallel, sloping lines, with the price testing each boundary at least twice. Despite uncertainty in defining the exact pattern, Brandt highlighted the potential for a breakout in either direction, indicating a neutral stance on Ethereum's immediate price movements.
This neutral outlook aligns with the broader market sentiment. Data from Santiment revealed that sentiment towards top cryptocurrency assets remains "negative," a trend persisting since the Bitcoin halving on April 19. This event failed to trigger a significant increase in market caps across the sector.
Overall, this prevailing sentiment suggests that while short-term gains are plausible, the market maintains a cautious stance regarding longer-term prospects.
Indications of improvement and technical perspective
Despite the prevailing pessimism, there are indications of a possible recovery on the horizon.
Glassnode data shows a significant increase in the number of new Ethereum addresses, surpassing 160,000 from its previous lows below 100,000 in January. This surge in new addresses could suggest growing interest and potential investment in Ethereum, despite recent challenges.
From a technical standpoint, Ethereum's daily chart still reflects a bearish trend currently. However, a closer examination of the 4-hour chart suggests the possibility of short-term upward movement. This potential uptick might be a tactical maneuver by the market to eliminate liquidity at higher levels before resuming the ongoing downtrend.
May 2024, Cryptoniteuae