Is ether (ETH/USD) headed to $5,000 and beyond?! 😲

In a note to clients, Matt Hougan, the Chief Investment Officer at crypto index fund manager Bitwise, predicts ether’s price will reach all-time highs above $5,000 resulting from spot Ethereum ETF inflows.

Hougan expects the primary few weeks after the ETFs launch to be “choppy” for ether, but by year-end, he’s confident that recent highs will likely be reached.

Should you haven’t kept up with Ethereum news, the SEC in the US approved eight spot Ethereum ETFs from various issuers.  The approval is seen as an enormous milestone for the crypto industry because it provides investors with a recent solution to gain exposure to Ethereum.

Hougan thinks that spot Ethereum ETFs will attract $15 billion of net inflows of their first 18 months. Such significant inflows would push the worth of ETH/USD to recent all-time highs. And if flows are stronger than many market commentators expect, the worth may very well be much higher still.

Should you’re recent to Ethereum and crypto, try our  School of Crypto.

Sounds bullish. But what in regards to the technicals?

Welcome to TA of the Day (TAOTD)! 👋

Here’s the each day chart:

ETH/USD 1D Chart by TradingView

The chart displays the worth motion of ether (ETH) against the US Dollar (USD) on the Coinbase exchange from the beginning of 2024 until July 18, 2024.

📈 Technical Evaluation of ETH/USD 1-Day Chart

Using technical evaluation concepts covered in our forex course, let’s analyze ETH/USD.

Moving Averages:

SMAs:

• 10-period SMA: Positioned around 3,254.98. The value is currently above this level, indicating short-term bullish momentum. The slope is upward, suggesting short-term strength.
• 50-period SMA: Positioned around 3,445.13. The value is barely below this level, indicating that the recent uptrend could also be facing resistance. The slope is downward, suggesting medium-term weakness.
• 200-period SMA: Positioned around 3,152.08. The value is above this level, indicating long-term bullish momentum. The slope is upward, suggesting sustained long-term bullishness.

Should you’re recent to moving averages, read our School of Pipsology lessons on the right way to use moving averages.

Relative Positioning of Moving Averages:

• The 10-period SMA is currently below the 50-period SMA, indicating that the short-term trend had been weaker than the medium-term trend until recently. The recent price movement above the 10-period SMA suggests potential short-term bullishness.
• The 50-period SMA is above the 200-period SMA, indicating that the medium-term trend is more bullish than the long-term trend. Nonetheless, the worth currently being below the 50-period SMA suggests a possible medium-term resistance.
• The 10-period SMA is above the 200-period SMA, reinforcing the general long-term bullish trend.

Should you’re recent to moving average crossovers, read our School of Pipsology lessons on moving average crossovers.

MACD:

• MACD Line: The road is rising, indicating bullish momentum.
• Signal Line: The road is rising, indicating bullish momentum.
• Histogram: The histogram is positive, suggesting bullish momentum, however it appears to be decreasing, indicating potential weakening of the present bullish trend.

Should you’re recent to MACD, read our School of Pipsology lessons on the right way to use the MACD indicator.

Volume Evaluation:

• Volume Trend: Volume has been relatively stable with occasional spikes. Recently, there was a spike in volume throughout the price increase, indicating strong buying interest.
• Volume and Price Correlation: The recent increase in price accompanied by increasing volume suggests that the upward movement is supported by strong buying interest. Conversely, the worth declines have been on lower volume, indicating less selling pressure.

🕵️ Key Observations

Price Motion:

• Uptrend: The value has been in an uptrend since late January, characterised by higher highs and better lows.
• Correction: Recently, the worth corrected from its peak of around 3,800 and is currently attempting to resume the uptrend.

Support and Resistance Levels:

• Support:
  • Immediate support is around 3,255, which aligns with the ten SMA and up to date low.
  • 3,150 (horizontal level, coinciding with the 200 SMA)
  • 2,800 (horizontal level, previous swing low)
• Resistance:
  • Immediate resistance is around 3,445, which aligns with the 50 SMA and up to date high.
  • 3,500 (horizontal level, previous swing high)

Should you’re recent to support and resistance, read our School of Pipsology lessons on the right way to use support and resistance levels.

Moving Averages:

• The ten SMA is currently acting as support.
• The 5 0 SMA was acting as resistance during May and June but was briefly breached in early July. The value did not hold above the 50 SMA and is now back below it acting as resistance.
• Price motion in early July tested the 200 SMA as support, suggesting a possible weakening of the long-term bullish momentum.

Should you’re recent to moving averages acting as support and resistance, read our School of Pipsology lesson,  The right way to Use Moving Averages as Dynamic Support and Resistance Levels.

MACD:

• The MACD is currently above the signal line, indicating bullish momentum. Nonetheless, the decreasing histogram suggests that the bullish momentum is likely to be weakening.

🤔 Potential Trade Scenarios

Is ETH/USD a buy or sell?

The next trade scenarios are provided solely for educational purposes. Since they don’t include full risk management practices, they are usually not intended to function actual trade recommendations, but merely food for thought to assist you generate your personal trade idea.

Long Bias:

• Consideration Point: Consider entering a protracted position if the worth finds support near 3,255 and shows signs of a bounce, reminiscent of a bullish candlestick pattern or a positive divergence. Moreover, a breakout above the resistance level at 3,445 with strong volume could indicate a continuation of the uptrend.
• Invalidation Point: Consider setting a stop-loss below the support level of around 3,200 to administer risk.
• Potential Goal: Search for a move towards 3,600 and better if the uptrend resumes.

Short Bias

• Consideration Point: Consider entering a brief position if the worth fails to interrupt above the resistance level at 3,445 and shows signs of bearish momentum, reminiscent of a powerful bearish candlestick pattern or a negative divergence.
• Invalidation Point: Consider setting a stop-loss above the recent high at 3,500 to administer risk. This level is crucial as a break above it could invalidate the bearish setup.
• Potential Goal: Initial goal may very well be the support level around 3,255. If bearish momentum continues, search for further downside towards 3,000 or lower.

📝 TAOTD Summary

• Trend: The long-term trend appears to be bullish, however the short-term trend shows some resistance across the 50 SMA.
• Key Levels: Support at 3,255 and resistance at 3,445.
• Momentum: The MACD indicates bullish momentum, however the decreasing histogram suggests that this momentum could also be weakening.
• Volume: Increasing volume throughout the recent price increase suggests strong buying pressure, while lower volume during price declines indicates less selling pressure.
• Moving Averages Evaluation:
  • The upward slope on the 10-period SMA indicates short-term bullish momentum, while the downward slope on the 50 SMA suggests medium-term resistance.
  • The upward slope on the 200 SMA reinforces the long-term bullish trend.
  • The relative positioning of the moving averages shows that while there’s short-term and long-term bullishness, medium-term resistance may should be overcome for further gains.

This content is strictly for informational purposes only and doesn’t constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to ensure that you understand the risks involved.