As the price of Ethereum (ETH) finally breaks out from its multi-month descending trend line, many investors are wondering if this is the beginning of a new bullish trend.
ETH has rebounded sharply over the past two weeks, gaining 30% from the March 7th low for a March 28 tape print of $3,390 a coin.
However, there are still some risks that could prevent Ether from reaching higher prices. In fact, some market analysts are predicting the digital asset could easily fall back to its lows of around $1,800.
The downside argument is based on the premise of ETH’s price uptrend exhausting soon, to revers and fall back into a selloff range that has served as a key support-turned-resistance area for traders in the January-February session.
Ether prices have been on a roller coaster ride since January. The price reached its lowest point on Jan. 24 at $2,112. It then rose until it hit a resistance level on Feb. 9, just below $3,260. This range continues to be critical for ETH since it served as a shorting zone for traders.
A clear break below the $2,880 support area could open the doors for a downward move from the $2,600 handle to the next key support level near the $1,850 – $1,800 area. Further loses could possibly lead the price towards the $1,700 level.
Conversely, the bearish thesis could be invalidated if ETH prices decisively overcome the immediate resistance range at $3,260. @PostXBT, an independent market analyst, said in a tweet that flipping levels around $3,350 back to support could prompt the smart contract cryptocurrency to hit $4,000.
Decent pump but ETH still at weekly resistance. A little cautious and would like to see a bit more here.
Flip ~$3,350 and then we can discuss the possibilities of $4k again. pic.twitter.com/zNWqVMRtsg
— Posty (@PostyXBT) March 28, 2022
As buyers and sellers battle it out, Ethereum’s 30% bi-weekly surge in price, which coincided with the network’s successful merge test towards a shift to Proof-of-Stake consensus, seems more like a strong, trending move rather than just a temporary correction.
Near-term resistance for Ethereum price is at $3,500 then $3,750. Above that, $4,000.
Disclaimer: The information provided is not trading advice