Ethereum (ETH), the second-largest cryptocurrency, is stuck in a frustrating holding pattern, mirroring Bitcoin’s recent sideways movement. While some analysts see a potential bullish trend brewing, others remain cautious.
Crypto analyst Josh of Crypto World warns that Ethereum’s current price action might simply be a brief respite in the ongoing downtrend. He points to similar sideways patterns in the past that ultimately led to further declines.
Ethereum’s Price Squeeze: Support and Resistance
On the daily chart, Ethereum is bouncing between two key technical levels: the 50% retracement level around $3,350 acting as support and the previous Fibonacci resistance at approximately $3,480. A bullish divergence, a technical indicator suggesting a potential reversal, is offering a glimmer of hope. However, Ethereum continues to struggle to overcome the critical resistance at $3,450.
Recent rejections at this level have raised concerns. Even if Ethereum manages to break above this resistance and the $3,480 level, it would still face another hurdle – a strong resistance zone between $3,600 and $3,650. This scenario is reminiscent of a previous period where a bullish divergence failed to trigger a long-term uptrend.
Confirmation Needed for a Bullish Reversal
For a confirmed bullish trend reversal, Ethereum needs to break decisively above significant resistance levels like $3,650. This hasn’t happened yet. While the bullish divergence offers a potential ray of light, the overall trend remains bearish, leading to choppy sideways price action in the short term.
Solana Shines Brighter: Potential Bull Run Ahead
In contrast to Ethereum’s struggles, Solana (SOL) recently confirmed a breakout above a critical resistance zone between $140 and $144. After retesting this area as new support, Solana formed an inverse head and shoulders pattern, a bullish technical indicator.
To confirm this pattern and unlock further upside potential, Solana needs to break above the neckline around $151-$152 with a confirmed daily candlestick close. If successful, this pattern projects a bullish price target near $180, representing an attractive 18-19% increase.
However, navigating to that target won’t be a straight shot. There are resistance levels at $160, $170-$175, and $183-$187 that could pose challenges. Nevertheless, Solana’s overall price structure is showing positive signs, with previous resistance transforming into new support.
Uncertain Ethereum vs. Potentially Bullish Solana
Ethereum remains stuck in neutral, with a potential bullish move yet to be confirmed. Investors should be cautious and wait for a clear break above key resistance levels before getting too optimistic. On the other hand, Solana’s technical setup suggests a brighter future, with a potential price surge on the horizon if the inverse head and shoulders pattern is confirmed.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of ChainAffairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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