ETH bulls are eyeing a fresh leg up after bouncing off lows of $2,650
Ethereum price has broken higher over the past 24 hours after starting an uptrend off lows of $2,650 reached during this week’s Evergrande-catalysed crypto sell-off. Given the possibility of profit taking, Ether might see some sideways action in the $3,000 to $3,300 region before a new leg up takes prices to $4,000.
According to on-chain data analytics platform Santiment, the Market value-to-Realised value (MVRV) 7-day moving average ratio for Ethereum indicates ETH price is currently below its “fair value”. The data points to most short-term holders being in loss, a scenario that is likely to see a spike in buy-side pressure leading to another bounce in Ethereum’s price.
Ethereum price short-term outlook
Ethereum’s bounce off support at $2,650 has seen bulls head higher as seen on the hourly chart of the ETH/USD pair. The cryptocurrency’s recovery has included a spike above a bearish trendline formed since the downtrend on 19 September.
The upside sees ETH well above the 50 SMA, with bulls likely to focus on forming a new support base at the horizontal resistance line near $3,100.
The Super Trend indicator signals buying pressure for Ethereum, with the uptrend likely to continue if buyers break above the 1.236 Fib level ($3,210).
A successful breakout to the 200 SMA (hourly chart) will validate the buy signal and potentially see ETH/USD seek fresh gains near the $3,500 supply wall. From here, buyers can target a retest of the $4,000 level, with the possibility of seeing a new all-time high before the close of 2021.
ETH/USD hourly chart. Source: TradingView
Technical indicators that also support the above outlook are the Parabolic SAR below the price level; the RSI in a positive divergence near the overbought territory; and the MACD line above the Signal line and looking to strengthen within the bullish zone.
ETH/USD chart showing bullish indicators. Source: TradingView
From the above technical outlook and the on-chain data mentioned earlier, traders are likely to target an upside to $4,000 by early October. On the downside, sellers might fancy a retest of the main support zone around $2,800 to $2,720.
According to technical analyst Rekt Capital, ETH achieving a monthly close in the $2,777 region would see bulls “enjoy a green October”.