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Ethereum Price Faces Resistance at $2,700: Will It Reverse?

16/01 20:04

ETH

3.41%

According to CryptoPotato, Ethereum's price has encountered a significant obstacle following a substantial surge last week, leading to market correction and traders questioning whether a reversal is on the horizon. On the daily chart, Ethereum's price has been very bullish over the last quarter of 2023, increasing by more than $1,000. Recently, ETH has experienced an aggressive rally toward the $2,700 resistance zone. However, this level has decisively rejected the price, and a correction toward the $2,400 area has begun. The Relative Strength Index still demonstrates values above 50%, indicating that the momentum is still bullish and the price is likely to continue its uptrend after the correction is done. Looking at the 4-hour chart, it is clear that ETH’s price has formed a double-top pattern at the $2,700 resistance level. The relative strength index also signaled that the asset is overbought in this timeframe. Currently, the price is forming lower highs and lows, potentially targeting the $2,400 level in the short term. Yet, this level seems likely to hold the price and initiate a rebound back toward the $2,700 level afterward, as the overall market structure is still bullish. While Ethereum’s price is still continuing its bullish trend, some worrying signs are arising from the derivatives market. The Taker Buy Sell Ratio, one of the most valuable metrics for futures market sentiment evaluation, has never recovered above one during the recent uptrend, and the price has been rallying higher. However, it is currently dropping rapidly, making a new low. This cannot be interpreted well, and the subsequent aggressive selling pressure by the futures trader can soon cause a considerable decline in price.

Bullish

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