The second-largest cryptocurrency by market cap, Ethereum, kicked off the week on the right foot. Although its price dropped to a low of $227.30 before Monday (June 22nd) market open, the buying pressure behind it rose as a new weekly candlestick began to develop. Subsequently, Ether appreciated by nearly 10% to hit a high of $249.80 a few hours after Wednesday’s candlestick open.
Since the peak, however, the smart contracts giant has lost most of the gains incurred during June 22nd’s trading session. The bears appear to have stepped in throughout June 24th pushing ETH down by more than 7.5% to a low of $231. Ethereum is hovering around $234, at the time of writing, as it attempts to rebound.
From a technical perspective, the decentralized open-source token is going through a period of consolidation that has allowed the Bollinger bands to compress on its daily chart. Squeezes occur during prolonged stagnation phases and are usually succeeded by high volatility.
While Ethereum sits in the vicinity of a significant price movement, its 4-hour chart paints a better picture of where it could be headed next.
Within this time frame, Ether’s price is contained in a parallel channel that began to take shape in the beginning of the month. Consistent with the characteristics of this technical formation, every time Ethereum’s price appreciates to reach the upper boundary of the channel, it gets rejected by this hurdle and retraces to the lower boundary. Around this support level buy orders usually increase allowing Ether to bounce back up again.
A clear breakout below or above this critical consolidation area will likely determine the direction of ETH’s trend.
If this were to happen, drawing a parallel line equal to the width of this parallel channel can help determine potential bearish and bullish targets. Moving past the $225 support level, for instance, could be followed by a spike in sell orders that sends Ethereum down to $203.60. Conversely, turning the $249.50 resistance level into support may see ETH rise towards $276 or higher.
Strong Resistance Ahead
Based on the number of addresses that have previously purchased Ether at critical price points, there is a massive supply wall ahead of this altcoin.
Indeed, data shows that 2.3 million addresses bought 11 million ETH between $234 and $247. This massive resistance barrier may have the ability to absorb any upside pressure since these addresses will likely try to break even if an upswing occurs.
On the flip side, only 1.3 million addresses had previously bought 3.3 million ETH between $225 and $232.5.
Comparing the strength of these support and resistance levels reveals that the odds favor the bears. As a result, investors must remain cautious about a break of the $225 barrier. A further increase in the selling pressure behind Ethereum may see it drop towards $200.
Since the peak, however, the smart contracts giant has lost most of the gains incurred during June 22nd’s trading session. The bears appear to have stepped in throughout June 24th pushing ETH down by more than 7.5% to a low of $231. Ethereum is hovering around $234, at the time of writing, as it attempts to rebound.
From a technical perspective, the decentralized open-source token is going through a period of consolidation that has allowed the Bollinger bands to compress on its daily chart. Squeezes occur during prolonged stagnation phases and are usually succeeded by high volatility.
While Ethereum sits in the vicinity of a significant price movement, its 4-hour chart paints a better picture of where it could be headed next.
Within this time frame, Ether’s price is contained in a parallel channel that began to take shape in the beginning of the month. Consistent with the characteristics of this technical formation, every time Ethereum’s price appreciates to reach the upper boundary of the channel, it gets rejected by this hurdle and retraces to the lower boundary. Around this support level buy orders usually increase allowing Ether to bounce back up again.
A clear breakout below or above this critical consolidation area will likely determine the direction of ETH’s trend.
If this were to happen, drawing a parallel line equal to the width of this parallel channel can help determine potential bearish and bullish targets. Moving past the $225 support level, for instance, could be followed by a spike in sell orders that sends Ethereum down to $203.60. Conversely, turning the $249.50 resistance level into support may see ETH rise towards $276 or higher.
Strong Resistance Ahead
Based on the number of addresses that have previously purchased Ether at critical price points, there is a massive supply wall ahead of this altcoin.
Indeed, data shows that 2.3 million addresses bought 11 million ETH between $234 and $247. This massive resistance barrier may have the ability to absorb any upside pressure since these addresses will likely try to break even if an upswing occurs.
On the flip side, only 1.3 million addresses had previously bought 3.3 million ETH between $225 and $232.5.
Comparing the strength of these support and resistance levels reveals that the odds favor the bears. As a result, investors must remain cautious about a break of the $225 barrier. A further increase in the selling pressure behind Ethereum may see it drop towards $200.