Ethereum, the world's second-largest cryptocurrency, has been on a roller coaster recently, falling below the psychologically important threshold of $3,000, but then backtracking again, giving Ethereum's price movement a bullish signal. There has been a confusing mix of bearish signals.
Bullish Whispers: New Investors and the Short-Term Rally
A recent surge in new addresses on the network has provided a glimmer of hope for Ethereum bulls. The number of new Ethereum addresses has skyrocketed to over 160,000, according to data from Glassnode. This is in contrast to his low of less than 100,000 observed in January.
This influx of new users suggests that interest and potential investment in Ethereum is increasing, even as the currency has struggled recently.
Source: Glassnode
Moreover, technical indicators on the 4-hour chart suggest a possible short-term upside. Analysts at NewsBTC point to increased volatility, symbolized by the widening of the Bollinger Bands, which could pave the way for a temporary price increase. This strategic move by the market may be aimed at attracting buyers before the general downtrend resumes.
A bearish shadow looms: market sentiment and technical trends
However, that joy may not last long. The overall market sentiment surrounding cryptocurrencies remains decidedly negative, a trend that Santi believes continues as April's much-anticipated Bitcoin halving event failed to result in a significant market rally. ment data, suggesting investors remain cautious despite the short-term price recovery.
feelings for 😒 #cipher's ceiling asset is still quite negative. It's been that way since April 19th. $BTC #Half The overall market capitalization did not rise immediately. #cryptocurrency. Small wallets may exit this space due to high uncertainty… pic.twitter.com/7FXYheGnX0
— Santiment (@santimentfeed) May 9, 2024
Adding fuel to the bearish fire, Ethereum’s daily chart continues to paint a murky picture. Technical analysts point to the continued collapse of the price structure as a downside factor, suggesting that the downtrend may continue. Even the Relative Strength Index (RSI) remains in the low 40s, further reinforcing the bearish mood gripping the market.
Ethereum is now trading at $2,904. Chart: TradingView
Chart patterns and breakout potential: a neutral view
Amid conflicting signals, experienced trader Peter Brandt offered a more neutral perspective. Analyzing Ethereum's price chart, which Brandt described as “interesting,” he identified two potential technical patterns: a flag and a channel.
Ethereum $ETH It turned out to be a very interesting chart for me.
The pattern is too long to be considered a flag, but the channel is the most likely label.
This chart could go either way pic.twitter.com/EeSa7SyAmA— Peter Brandt (@PeterLBrandt) May 9, 2024
Flags usually indicate the continuation of the current trend after a short pause, while channels allow price movements within a defined range. Ambiguity surrounding the exact pattern suggests a possible breakout in either direction, leaving Ethereum's immediate future uncertain.
Ethereum: The way forward
Ethereum's future trajectory remains shrouded in uncertainty, with conflicting technical signals and a negative market atmosphere. Although short-term price spikes are possible, the long-term trend appears to be bearish.
The next few weeks will be crucial for Ethereum. Ethereum will look to weather these torrents and provide a clear direction in the coming weeks and months.
Featured images from Pexels, charts from TradingView
