Ethereum Crosses $1,700, But Could Return To Path Of Pain, Expert Says

Ethereum (ETH) took off over the weekend and extended its gains during today’s trading session. The second crypto by market capitalization could extend its gains, as “consolidation” becomes a certainty.

The event that will complete Ethereum’s transition from Proof-of-Work (PoW) to Proo-of-Stake (PoS) consensus algorithm “Merge” is set for September 2022. One of the most anticipated dates for crypto in the industry, market participants appear to be split about its short-term effects.

At the time of writing, ETH price is trading at $1,770 with gains of 3% and 5% over the last 24 hours and 7 days, respectively. Like NewsBTC mentioned$1700 was a critical resistance area for Ethereum as this level could provide more clues for the direction of ETH’s price.

If the cryptocurrency can turn this resistance level into support, the current bullish momentum may be sustained and lead to a new bullish rally. The opposite may happen at the current levels of ETH price, the market may witness a bear attack with new force.

The above is based on an idea from Jarvis Labs looking at the 30-day returns of Ethereum, a metric used to measure short-term profits and losses of cryptocurrency investors over that period. 3 weeks ago this metric was trending around 0% after moving in negative territory for a while.

In the past, whenever Ethereum flipped its 30-day yield into positive territory, above 0%, the price of the cryptocurrency was trading in a downtrend for a long time. Hence, why is it important for the price of ETH to reach higher levels.

Raoul Pal, a former Goldman Sachs employee, believes that the price of ETH will return to the “pain path,” according to the theory outlined above. Pal believes that market participants have taken short positions in anticipation that the price of ETH will fail to cross $2000.

ETH price with significant gains on the 4 hour chart. source: ETHUSDT TradingView

Will Ethereum fail to cross $2000?

These merchants might be in for a surprise if it’s true prediction Achieved as Ethereum could continue to the upside beyond expectations:

(…) My view is that the biggest battle is around $2300 and the trend channel. Usually, correction channels like this do not break on the first try and correct sharply in the range first, but this is possible for a few weeks.

In this sense, Ethereum appears to be on course for fresh gains above key resistance levels, but traders should tread carefully as ETH price may retest the lower channel for the next trend, Pal said. This could put the ETH price below the yearly lows of $900.

If that happens, will ETH experience long-term downward pressure, or could a “consolidation” push it to previous highs?

ETH price is approaching the top of a major trend line at $2000. Source: Raoul Pal via Twitter

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