ETH price has been flat for the last 7 days but has seen strong upward momentum over the last month. Following a sell-off from recent yearly highs, why are traders looking for the digital asset to retest yearly highs in the short term? We take a look at the technicals and outline strong levels to keep an eye on this week.
At the time of this reporting, Ethereum is currently trading at $448.91. The second-largest digital asset by market cap has been down ~ 1% the last week but has done well over the last month. Even though it is underperforming Bitcoin, Ethereum has still managed to rally ~ 24% in the last 30 days.
Most recently, Ethereum cracked a yearly high around $482, as many investors are looking forward to the upcoming launch of ETH 2.0. With the Ethereum network being congested this year, ETH 2.0 is expected to lower fees and create a more efficient network. ETH 2.0 is expected to launch early next month if everything goes smoothly. The rally to yearly highs came to a halt as ETH price ended up retracing to $450 levels. Based on the current technicals, what price levels will traders be watching this week?
Ethereum Technical Analysis
As mentioned above, ETH price recently hit new yearly highs on November 13th. This strong bull run originated in late September when ETH bounced off key support around $310. Since then, Ethereum rallied into $480 territories before witnessing a small pullback. With ETH currently trading around $448.91, the digital asset is still in a good spot to potentially retest the yearly high.
We can see the short pullback that ETH price has experienced since it hit yearly highs this year. The last time Ethereum saw these levels was in early September. ETH was unable to maintain the levels at the time and saw heavy selling pressure all the way to $320. The environment is a bit different this time around, especially with Bitcoin FOMO kicking in and ETH 2.0 FOMO kicking in.
With this being said, we still believe that ETH will retest and put in new yearly highs in the short term. There is strong support at $420 right now for ETH/USD. As long as ETH price can hold above that level, we believe that bulls will remain in control. On the contrary, if ETH did end up rejecting $420 support, the narrative would then change a bit. Many traders will most likely manage risk by having their stops right below $420 to protect against a strong sell-off. This also provides some cushion and puts traders in a good position to catch another leg up.
Another indicator we continue to watch is ROC ( rate of change ). This indicator is outlined at the bottom of the chart and helps assess momentum. Any figure above 0.00 denotes bullish momentum. Right now ETH is a bit lower than we would like to see, but it still remains in a neutral zone right around 0.
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