Ethereum price has shown a strengthened bullish outlook mid-week, with a 4.8% gain in 24 hours that goes hand in hand with a market-wide recovery led by the most prominent crypto, Bitcoin. The surge by more than 7% saw Bitcoin breach the $29,000 resistance, following last week’s sell-off below $25,000. This upturn in the market has investors reconsidering the potential short-term gains that can be tapped following the Federal Reserve decision on interest rates.
The pause of interest rate hikes is expected to support risk assets like Bitcoin and Ethereum, with additional influence coming from Blackrock’s spot Bitcoin ETF application, which continues to buoy the crypto market. The market has also witnessed an influx of institutional investors entering the crypto space with various products, such as Fidelity Investments backed EDX Markets, which launched earlier this week.
Ethereum price currently sits above the applied moving averages, which include the 200-day Exponential Moving Average (EMA) at $1,728, the 100-day EMA at $1,785, and the 50-day EMA at $1,806. The bullish outlook began to form immediately after the recent dip to $1,625 and now is just a few steps away from closing the gap to $2,000. A buy signal from the Moving Average Convergence Divergence (MACD) indicator is expected to bolster the move above $2,000.
The trend reversal observed in the market can be attributed to an influx of funds into Ethereum markets, as seen by the Money Flow Index (MFI) moving toward the midline after hitting a low of 27 on Monday. A daily close above two key levels would be essential for Ethereum to validate the rally. First, the 50-day EMA and the 100-day should be kept above with support from bulls, and secondly, short-term support at $1,800 is imperative for the ongoing $2,000-bound price action.
It is worth noting that new long positions in Ethereum may have to wait until these conditions are validated, which would help traders avoid potential bull traps that may lead to sudden pullbacks. Key support areas to watch out for in the event of a trend correction below $1,800 include the 200-day EMA at $1,728 and the potential support along the ascending trendline.
As the Bitcoin halving event in less than ten months approaches, analysts like Michaël van de Poppe have been urging investors to consider buying altcoins like Ethereum. Such halving events, which reduce BTC miner rewards, have historically been associated with the onset of a bull market. Buying Ethereum and other altcoins at this time could give investors a golden opportunity to capitalize on the predicted bull market in 2024 going into 2025.
Source: Coingape
