Ethereum prices over the last seven days were riddled with a lot of uncertainty. Following the massive downtrend two weeks ago, many looked forward to a quick recovery. However, this never happened as the entire crypto market experienced low volatility.
This is also reflected in the prices of most assets including ETH as it ended the previous week with no notable losses or gains. There are indications of an impending massive increase in the uptrend. One such is the Rainbow chart.
Ethereum breaks below its Rainbow Chart
The Ethereum rainbow chart is one of the most reliable metrics for long-term predictions. The indicators in this chart are the color. Made up of nine different hues, many turn to it to understand without taking into consideration the little volatility.
One of the key colors to watch is purple. It is at the end the pattern and once prices drop to this level, many expect massive uptrends. However, this never happened. Instead, the asset fell below the level.
Nonetheless, this is another fire signal of an impending bullish run. The question is when will this happen and do the daily charts support this? Let’s see
An Impending Bullish Divergence
Aside from the bearish pattern on the chart, indicators like the Moving Average Convergence Divergence offer hope. A closer look at the segment dedicated to this metric, we noticed that both the 12-day EMA and 26-day EMA are touching.
Currently in the convergence stage, a divergence will follow. This may be a signal of a massive price increase. Going to the Relative Strength Index, it points to the fact that the asset under consideration is experiencing an almost equal amount of buying and selling.
This is more evident as the metric remained at 43 for the past 48 hours. However, this does not mean a permanent end to the current crypto winter. To better understand this, let’s look at the Moving Averages.
We observe the steady downtrend and the gradual close of the gap between the 50-day MA and the 200-day MA. An interception would mean a golden cross, which on many occasions sparked hopes of better price performance.
If the current price trajectory remains the same, we may expect this to happen in the final days of 2022. Before the MA crossings, let’s examine some key levels to watch.
Key Levels to Watch
Vital Support: $1,100
Vital Resistance: $1,250, $1,400, $1,600
On the part of support, the only key level before a dip below $1k is the $1,100 barrier. Once it fails, it is almost guaranteed that we may see a drop to sub-$1000. The current price shows that ethereum is holding on to this vital mark.
One level that served as a strong support in recent times is the $1,200 barrier. Currently a resistance, we may see an attempt to regain it after the bullish divergence. Flipping may see it resume its previous role.
The $1,400 resistance is another force to reckon with as it took several tests to break it. Nonetheless, it will break as we notice the massive demand concentration at $1,300. The toughest on the list is $1,600.
