ETH/USD technical analysis and why the market may still rally
- $1000 acted as solid support for Ethereum
- A triangle as a reversal pattern reveals a bullish medium-term perspective
- The rally on the small timeframes might continue
The cryptocurrency market rebounded in 2023 after a bearish market in 2022. Bitcoin led the decline, and other cryptocurrencies, such as Ethereum, followed.
The US dollar’s strength is part of the reasons investors fled the cryptocurrency market. But other factors also contributed to the so-called “crypto winter” from last year. For example, the FTX scandal left many investors without funds.
But against all odds, the crypto market rebounded in 2023. Bitcoin is up close to 50%, and Ethereum followed.
So here is a technical analysis based on the long, medium, and short-term perspectives for the ETH/USD. Where will Ethereum go next?
ETH/USD long-term view
The one thing that strikes the eye on the monthly chart (besides the huge drop in 2022) is the strong support offered by the $1000 level. Often, the round numbers offer support or resistance, and it appears to be the case here.
The larger the timeframe, the stronger the support or resistance is. This being the monthly chart, we should not be surprised that Ethereum bounced from support.
The medium-term perspective
Coming down to the daily chart, the bullish bias remains. Ethereum consolidated above the support level mentioned earlier and formed a contracting triangle.
This triangle acted as a reversal pattern, as the price broke above the upper trendline. Therefore, the end of the triangle should act as an invalidation level for any long trade.
The short-term view
From a short-term perspective, the market appears to form a pennant. This is a short-term consolidation pattern usually followed by another rally.
However, until the price breaks higher, it is difficult to anticipate the market’s direction on such a small timeframe.
Nevertheless, Ethereum formed an inverse head and shoulder pattern around $1,500. The lowest point on the pattern should act as a warning signal for bulls, should the price reach it.
All in all, the positive momentum in the cryptocurrency market continues. As a result, Ethereum’s technical analysis has a bullish bias.
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