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ETH price appears to be bottoming but analysts are watching for $2,850 to flip from resistance to support before calling a bullish reversal.
MARKET ANALYSIS
The dire predictions calling for the onset of an extended bear market may have been premature as prices appear to be in recovery mode on Jan. 26 following a signal from the U.S. Federal Reserve that interest rates will remain near 0% for the time being.
After the Fed announcement from, prices across the cryptocurrency market began to rise with Bitcoin (BTC) up 4.11% and making a strong push for $39,000. This sparked a wave of momentum that helped to lift a majority of tokens in the market, but at the time of writing BTC price has pulled back to the $37,000 zone.
Data from Cointelegraph Markets Pro and TradingView shows that the top smart contract platform Ethereum (ETH) also responded positively to the rise in bullish sentiment as its price climbed 8.11% on the 24-hour chart to hit a daily high at $2,723.
ETH/USDT 1-day chart. Source: TradingView
Here’s a look at what several analysts in the market are saying about the price action for Ethereum and where the top altcoin could be headed in the short term.
Short-term analysis of Ether's price action was provided by crypto trader and pseudonymous Twitter user ‘CryptoAmsterdam’, who posted the following chart outlining one possible path the price of Ether could take in the near future.
ETH/USDT 1-hour chart. Source: Twitter
After noting the “nice 12% bounce” in the price of Ether “since the flip,” CryptoAmsterdam gave the warning that they “wouldn’t chase the green here.”
CryptoAmsterdam said,
“Will look for a potential short-term flip of bias if we get back under the lower time frame range high and break that little trendline.”
Further insight into the state of Ether was offered by options trader and pseudonymous Twitter user ‘John Wick’, who posted the following chart highlighting the formation of a bottoming pattern on the Ether chart.
ETH/USD 4-hour chart. Source: Twitter
Wick said,
“Ethereum showing the same bottoming pattern trying to break out of the resistance zone. Needs to see more upside from BTC to breakout.”
Related: Altcoins book 40% gains after Bitcoin and the crypto market enter a relief rally
A final bit of analysis on key levels to keep an eye on moving forward was shared by crypto trader and pseudonymous Twitter user ‘TheCryptoCactus’, who posted the following chart outlining a key support and resistance zone, as well as an area of heavy accumulation.
ETH/USD 2-day chart. Source: Twitter
According to TheCryptoCactus, those that “longed the bottom” are in a good position for an “easy hedge” at these levels, but the trader cautioned that what is needed next is “to get a valid support/resistance flip of $2,850.”
TheCryptoCactus said,
“Personally, would rather wait till we flip $3,000 into support again and then just ape a huge position.”
The overall cryptocurrency market cap now stands at $1.734 trillion and Bitcoin’s dominance rate is 41.5%
