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The $ETH rally has become a damp squib as fears of a big price correction grips the crypto market. $ETH looks as though it might be losing its latest up trend. Is it time to get out?
A strong $ETH is vital for altcoins
When the conversation is about an altcoin season, one of the major factors for this to happen is a strong uptrend in the price of $ETH. From around mid-October of 2023 this was the case, as $ETH broke through major resistance at $2,000 and then at $2,130.
The rally continued on up and touched resistance at $2,700 before being rejected and coming all the way back to the bullish trend line. This was a 79% rally, and while $ETH was mostly outshone by $BTC and a lot of the other altcoins, it wasn’t a bad gain for the number two cryptocurrency.
Source: Coingecko/Trading View
$ETH rally in danger
This rally is in danger, as the price is currently consolidating below the trend line. The break has already been confirmed by a daily candle closing below on Wednesday, and now Thursday’s candle has also confirmed and is bringing the price lower.
Source: Coingecko/Trading View
Very strong price supports below
Zooming out to the weekly time frame, the support that awaits the $ETH price below is very encouraging. A strong support level could hold the price up at $2,100, and below this is the support level for the entire price structure for $ETH built over this bull market so far, at around $2,000.
The ascending triangle is an extremely strong support, and should $ETH pierce through this and hold below, the $ETH bull market, and probably the bull market for the entire altcoin sector, would be in serious jeopardy.
That being said, markets do tend to function in this way. Once a breakout has been achieved, the ensuing rally would likely take the price higher, and this could be over a period of weeks, months, or even years, but eventually price might then come down to confirm the previous price structure, before potentially heading higher once again.
If bitcoin and the rest of the crypto market are in a corrective phase, then what the $ETH price is doing is par for the course. While a correction might be a pain for many traders and investors, this is far more healthy for the overall bull market than an unsustainable parabolic price surge.
Trade carefully.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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