Ethereum price experienced a lack of buying interest after the CPI announcement on January 12, signaling a possible reversal in the trend. Despite breaking through a crucial hurdle, the rally seemed to stall, with investors turning their focus on Bitcoin instead. However, Ethereum still managed to gain 2.80% after the US CPI numbers were released, while Bitcoin showed a 3.30% increase. This shift in attention could be a prelude to a countertrend rally in Ethereum.
Since retesting a breached parallel channel on January 8, Ethereum price has surged by 14%. However, signs of exhaustion in the rally are evident, as the Relative Strength Index (RSI) has been showing lower highs in the overbought region. This bearish divergence between the RSI and the price of Ethereum suggests a potential trend reversal in favor of bears. A confirmation of the countertrend rally would occur if Ethereum closes a four-hour candlestick below $1,375, with potential support levels at $1,215, $1,150, and $1,071.
On the flip side, a sustained uptrend leading to a four-hour candlestick close above $1,679 would invalidate the bearish thesis for Ethereum. In this scenario, Ethereum price could continue its upward trajectory and retest the psychological level of $1,700. This could signal a resumption of the uptrend for Ethereum, with the potential to reach even higher price levels in the future.
In conclusion, Ethereum price is at a critical juncture, with indicators pointing towards a possible reversal in the trend. The lack of buying interest after the CPI announcement and the bearish divergence in the RSI suggest that a countertrend rally may be on the horizon. Investors need to be prepared for potential support levels at $1,215, $1,150, and $1,071 if the reversal takes place. However, a break above $1,679 could signal a continuation of the uptrend for Ethereum, with a potential retest of the $1,700 level. It is essential for traders to monitor these key price levels and indicators to make informed decisions about their Ethereum investments.
Discussion about this post