Ethereum price is in the process of reaffirming a crucial bullish stance that could see it begin to rally above $2,000, with $2,220 coming up as its short-term target. But first, the most prominent smart contracts token must weaken the buyer congestion around $1,950.
A move such as this would serve as confirmation that ETH is finally ready to extend its leg above $2,000 and close the gap to $3,000.
Can Ethereum Price Tag $2,000 This Week?
Ethereum price is on the verge of validating a substantial breakout, with the possibility of propelling it above $2,000 before the weekend. An inverse head and shoulders (H&S) pattern, which completed its formation at the end of June, may trigger a 15.5% move to $2,200.
The inverse H&S is often seen as a strong bullish indicator. It is characterized by three distinct troughs, with the deepest one forming the ‘head’ and the two higher ones forming the ‘shoulders.’ The pattern signifies a potential reversal in a downtrend, as observed with Ethereum price on the four-hour chart.
Traders who accurately recognize this pattern strategically place buy orders above the pattern’s ‘neckline’ – which currently holds at $1,920 for ETH. This breakout often marks the end of bearish sentiments and the beginning of a new bullish era.
It is advisable to place the stop loss slightly below the neckline with the breakout or take the profit target assumed to equal the height of the pattern from the neckline to the head—extrapolated from the breakout point.
Meanwhile, Ethereum price holds marginally above its immediate support, provided by the 50-day Exponential Moving Average (EMA) (line in red). Traders looking forward to entering new long positions would want to wait until ETH establishes support above the inverse H&S neckline resistance to gain confidence in the incoming price rally.
According to the Money Flow Index (MFI), investors are starting to lean toward a bullish outcome following the retracement experienced since Monday, from $1,980 to $1,895. As the MFI index recovers toward the overbought region, momentum would build behind Ether, propagating a much-needed breakout past the $2,000 psychological level.
The Moving Average Convergence Divergence (MACD) indicator may flash another buy signal during the sessions on Thursday and Friday. This call to investors to buy ETH would come into the picture, with the MACD line in blue crossing above the signal line in red.
Furthermore, the momentum indicator’s position above the mean line suggests that Ethereum price is done with the correction, and bulls are ready to take the reins.
Traders may want to prepare for sudden pullbacks by watching out for Ethereum’s reaction to the neckline resistance at $1,920 and the subsequent hurdle at $1,950. A sustained position above either of these two levels would mean that bulls are still in the game, and traders can hold onto their long positions.
If support at the 50-day EMA bows to the selling pressure, the MACD will slip into the negative region, extending the bearish rout into the weekend. Ethereum may seek relief from the selling pressure starting with the next support at $1,884 (the 100-day EMA) and $1,858 (the 200-day EMA).
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
