The Ethereum (ETH) price has increased considerably since October 19, reaching a high of $1,854 today.
The increase validated a long-term ascending support trendline and took the price to a descending resistance trendline. Will Ethereum break out?
Ethereum Bounces at Nearly 500-Day Ascending Support Trendline
The weekly time frame chart shows that the Ethereum price has increased alongside an ascending support trendline since its June 2022 low of $882.
The support trendline has so far measured the slope of the upward movement.
The ETH price bounced at the trendline in October, creating a bullish, engulfing candlestick the next week (green icon). This is a type of bullish candlestick in which the entire previous decrease from the last period is negated in the next one.
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The previous time such a candlestick was created was in July 2021 (black icon). This led to the all-time high price of $4,868 in November.
ETH/USDT Weekly Chart. Source: TradingView
The weekly Relative Strength Index (RSI) is bullish.
With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.
Bulls have an advantage if the RSI reading is above 50, but if the reading is below 50, the opposite is true.
The RSI is increasing and has just moved above 50 (green circle), both signs of a bullish trend.
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Whales Continue Accumulating Ethereum
On-chain data for the Ethereum price gives a bullish sentiment. This is especially evident when looking at whale movements.
Early this morning, two whales withdrew 39,450 Ethereum worth nearly $68 million from Coinbase. Then, an hour ago, another whale also withdrew $15 million worth of ETH from Coinbase. So, $83 million of ETH has been removed from centralized exchanges in the last 24 hours.
Such large movements can often cause a supply shock, meaning that there is not enough liquidity to cover the demand for an asset, in turn causing a price increase.
A potential liquidation for former Frog Nation CFO 0xSifu could further exacerbate this. His account holds an ETH short position of over $21 million on Synthetix perpetual contracts. If the ETH price reaches $1926, he may be facing liquidation.
Price Prediction: Is Ethereum Yearly High the Next Target?
The technical analysis from the daily timeframe provides a similarly bullish outlook.
It shows that the increase was preceded by a long-term bullish divergence in the daily RSI (green). A bullish divergence occurs when a momentum increase accompanies a price decrease. It often precedes bullish trend reversals.
Today, the ETH price reached a descending resistance trendline that has been in place since the Ethereum yearly high.
If the price breaks out, it will confirm the bullish trend reversal. In that case, the next closest resistance area will be at $2,000, 10% above the current price. This will be slightly below the Ethereum yearly high of $2,141.
Due to the ongoing breakout, well-known cryptocurrency trader Crypto Tony believes that the ETH price will reach the target.
ETH/USDT Daily Chart. Source: TradingView
Despite this bullish ETH price prediction, a rejection from the resistance trendline can cause a 5% drop to the closest horizontal support area at $1,750.
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