Technical Analysis: Evaluate Ethereum’s Potential Rise to $2,000

By David 03/3/23 11:12 AM

Ethereum (ETH) has been rejected by a horizontal resistance zone, but the long-term trend seems to have shifted to an upward trend. The price is expected to continue to rise to $2,000.

Symmetrical Triangle

The price of Ethereum (ETH) broke out of the long-term symmetrical triangle pattern in the first week of January with a large bullish candle. This suggests that ETH may have formed a bottom.

This move has also helped the price break above the strong resistance level at the 20-week EMA line and approach the long-term resistance level at $1,700. Although the price has been rejected, the pullback only confirms the 20-week EMA line as support (green arrow). This is a bullish signal because it shows that the sentiment has shifted from selling on rallies to buying on dips.

The RSI indicator has formed a significant bullish divergence and is above 50, supporting the possibility of a breakout.

Therefore, ETH is likely to bounce from the current level or the 20-week EMA line ($1,500) and break out above the $1,700 level on the next attempt. If successful, the price could rise to the long-term resistance level of $2,000.

eth-bullish — ETH/USDT weekly chart. Source: TradingView

Consolidation Range

After a strong rally since the beginning of the year, ETH has consolidated within the range of $1,500 to $1,700. The consolidation right below such a strong resistance level is a bullish signal because it shows that the bulls are not in a hurry to take profits as they expect a higher price.

The price is currently testing the support of the range, which has helped the price bounce strongly in the previous times. Therefore, the price could bounce from this level and retest the resistance of the range once again.

This bullish view will be invalidated if the price breaks down below the support of the range at $1,500. If so, the price could drop to the $1,350 level, formed by the horizontal support zone and the 0.618 Fib support.