Disclaimer: The conclusions of the following analysis are the sole opinion of the author and should not be considered investment advice
A recent report described how Ethereum Net was entering the “confidence” phase of a rally based on an unrealistic P/L metric. Generally, when the metric tips green, a sustained rally has been observed on longer time frames in the past. In the near-term, open interest behind Ethereum futures has been rising over the past two weeks, according to data from Glassnode. This indicated that market participants were ready to deploy their capital as they see a potential rally coming for ETH. Can ETH rally towards $3800 and above?
ETH- 1H
On the chart, the price has reclaimed the 27.2% and 61.8% Fibonacci Extension levels (Yellow) as support over the past few days. These levels were plotted based on the ETH move from $2300 to $3043 in late February.
The $3411 level has also been an important long-term level which has been flipped for support. Therefore, on the chart, the price action was bullish. On the 1-hour time frame, although some volatility can be observed, it is likely that ETH was heading towards the 100% extension level at $3787.
argument
Bollinger Bands on the price chart were expanding based on the previous day’s price action, which saw ETH revisit $3411 as support and climb higher. The price was above the 20-period MA (orange), although it was not close to the upper band, which would indicate short-term overheated market conditions.
At the time of writing, the momentum was bullish according to both the MACD and the RSI. The RSI was above neutral 50, though not very high. MACD was also above its zero line after forming a bullish crossover.
Conclusion
On-chain metrics as well as longer-term price action point towards further bullish momentum for ETH. A retest of the $3411 level could be considered a buying opportunity in the next few hours to the next few days. Generally speaking, a move beyond the 61.8% Fibonacci extension level could propel the asset towards the 100% extension level, which in this case is at $3787.