Ethereum [ETH] could be undervalued at $3k, warned Bitmine Immersion’s [BMNR] Tom Lee. Yet, selling pressure from the 1k-10k ETH holder cohort continued. To add to the confusion, supply on exchanges was falling, hinting at accumulation.
The Fusaka upgrade pushed Ethereum toward a model where everyday activity happens on L2, while settlement occurs on the base layer. This can improve throughput and data capacity, as well as reduce network fees.
Smart money seems to believe that going long will be profitable, but this is no guarantee of the next move.
The next Ethereum move will likely be...
On the weekly chart, the swing structure (orange) is still bullish. Within this bullish structure, the dip below $4.2k in September reflected a bearish shift. The subsequent retracement to the $2.7k demand zone from May reinforced the weakness of the bulls.
Yet, in this timeframe, the bulls have the power to force a comeback. The RSI reflected bearish momentum with its drop below the neutral 50 in October.
The OBV, which had trended higher till September, began to turn downward swiftly.
Neither indicator showed that immediate bullishness is likely. However, the price action hinted at a possible bullish reaction from the $2.5k-$2.7k demand zone. So far, we have gotten an 18% move in three weeks.
On the 1-day timeframe, too, the bearish trend was visible. However, the move past the previous local high at $3.1k meant that the Ethereum internal structure was bullish on this timeframe. This aligned well with the swing weekly structure and could be the start of the next move higher.
To the north, the supply zone (red box) at $3,370-$3,660 posed a severe obstacle. It is possible that a move to this resistance would see ETH bulls rejected.
The OBV was feeble in its attempts to climb higher over the past three weeks. The RSI was yet to get pushed decisively beyond the neutral 50 line.
Gauging ETH’s next move
By the looks of things, the low volume was a warning of a lack of demand. As a result, even though the daily structure appears bullish, the $3.2k local support could still reject attempts by bulls to spark a rally.
Market sentiment remains bearish and fearful, with Bitcoin [BTC] still far from the key $100k psychological level.
Ethereum traders, look for THIS bullish setup
The lower timeframes, such as 4-hour and below, could yield bullish trade opportunities.
For example, on the 1-hour chart, the $3,014-$3,086 area is a short-term demand zone that is likely to yield a bullish move to $3.4k.
Final Thoughts
- Ethereum is sending mixed signals onchain and on the price charts.
- The bias, for now, shows bullish promise, but traders need to be prepared for a drop below $3k if the buying volume is unable to gather strength.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
