Ethereum price has experienced a pullback in recent days, as the market paused after a period of growth. ETH dropped to a low of $1,851 – 14% lower than its peak of $2,131. This means that the cryptocurrency has moved into the correction zone, when an asset drops by 10% from its high.
Is this the end of the crypto rally?
The decrease in Ethereum price has been driven primarily by Bitcoin’s price drop, which has gone from a YTD high of $31,000 to around $27,000.
There are various explanations for why cryptocurrency prices have declined in recent days. To begin with, the sell-off is likely due to the fact that investors are cashing in on their profits after certain key levels have been reached. Bitcoin recently crossed the $30,000 benchmark while Ethereum rose above $2,000. Cryptocurrencies often experience a sell-off after reaching such key levels.
Second, Ethereum price is being dragged down due to the ‘buy the rumour, sell the fact’ effect. ETH jumped recently in anticipation of the Shanghai upgrade, which would mean that investors would be able to withdraw their coins from certain platforms.
Thirdly, ETH price is also affected by the uncertainty surrounding the Federal Reserve. In a statement, Fed’s Christopher Waller said the Fed should continue to raise interest rates in the coming months. Analysts now expect the Fed to continue to increase rates in May and then have a prolonged pause.
Ethereum market forecast
On the daily chart, we can see that Ethereum price has been in an uptrend for a few months, going from ~$1,080 to a high of $2,040. The coin has formed a cup and handle pattern, which is a bullish sign. This means that the current dip is part of the handle section.
Furthermore, the coin is still trading above the 50-day exponential moving average. The Relative Strength Index (RSI) has crossed below the neutral point. This suggests that there is a good chance that ETH will bounce back in the near future. If it does, the next level to watch will be $2,500, which is 37% higher than the current price.
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The post Ethereum Market Forecast: Potential for a 37% Increase to $2,500 appeared first on CoinJournal.