Ethereum at a critical level

ETHUSD1D
Neutral
Oct 05 2021

MARKET FORECAST :

ETH/USD travelled precisely in accordance to our previously published analysis on 28th Sept, expecting that the crypto will be adapting to hawkish sentiments because of failing to break below 28.2% fibo level and taking strong support of the Senkou Span A and B of the ichimoku cloud. The aforementioned move was proceeded by a break above 50% fibo level 3059 while currently struggling to conquer the 61.8% fibo retracement zone and provide a strong closing above 3371 area. Ethereum price embarked on a 17% rally but is currently experiencing a slowdown as it encounters the 3371 supply barrier. Investors should note that there is a chance for ETH to retrace to 3059 before rallying higher. Regardless of a correction, if ETH continues to climb, the barriers at 3619, 3950 and 4400 will try to block its path. Therefore, the buyers need to shatter these hurdles to reach the target of 4816.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

While things are looking up for Ethereum price from a long-term perspective, the reduction in daily active addresses over the past month despite the increase in price shows that the market participants are still fearful. As long as there is uncertainty among a large group of holds, there is a chance for a flash crash that pushes Ethereum price down to 3200. Referring to the Supply Shock on-chain metric, Willy Woo, a popular on-chain analyst, mentioned in his recent newsletter,
Ethereum’s fundamental demand and supply has not been climbing as much compared to Bitcoin.
He also adds that this is the region of historical strength, further indicating that the long-term outlook for both BTC and ETH remains bullish. If Ethereum price drops below 2760 and produces a decisive close below it, it would create a lower low, invalidating the bullish thesis. In this case, ETH might bounce off the demand zone, ranging from 2440 to 2605 and give the uptrend another shot.