Ethereum has been seeing a surge in recent weeks with its price hitting an all-time high of $1,950 on February 20th. This has led to speculation about whether it can reach $2,000 before the upcoming Shanghai Upgrade on April 12th. In this Ethereum price analysis, we explore the potential for further growth in the cryptocurrency and what factors could lead to a significant price increase. With the crypto market currently experiencing a bullish trend, it’s possible that Ethereum could surpass the $2,000 mark in the weeks leading up to the upgrade.
Ethereum Breaks Above Resistance Level, but RSI Signals Caution
Ethereum, the second-largest cryptocurrency by market capitalization, has finally broken above a key resistance level and continues to rally higher. On the daily chart, the price is finally clearing the broken $1800 resistance level following multiple retests. The higher boundary of the large symmetrical triangle has also provided support for the price, pushing it back higher above the $1800 level earlier last week. Currently, the price could rise toward the $2300 level from a classical price action standpoint. However, the RSI indicator should be monitored closely as it is approaching the overbought zone, which could lead to a correction or reversal.
On the four-hour timeframe, it’s apparent that the price has finally broken out of the tight consolidation zone between the higher boundary of the symmetrical triangle and the $1850 resistance level. While this is considered a bullish signal as the price is making a new higher high, the RSI is signaling a clear overbought state on this timeframe, which could lead to a pullback or even a reversal in the short term. Therefore, the $1850 level, followed by the $1800 area and the higher trendline of the triangle pattern, could be the potential targets in the short term if the market corrects.
In terms of sentiment analysis, Ethereum’s Open Interest, which is a useful metric for futures market sentiment evaluation, has spiked significantly over the past couple of days as the price nears the $2,000 mark. Judging by previous instances, significant rises in open interest are typically followed by bearish corrections or entire trend reversals. Therefore, a price decline is seeming highly probable at the moment, as a slight drop would lead to a long liquidation cascade and likely result in a considerable plunge in price.
In conclusion, while Ethereum’s price is currently in a bullish trend, caution should be exercised as the RSI signals an overbought state and the futures market shows a worrying signal that a correction or reversal may not be far away. Investors and traders should pay close attention to potential pullbacks or reversals in the short term and have exit plans in place to mitigate any potential losses.
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