The popular altcoin collapsed during the third quarter, amidst the broader crypto-rout, having wiped out around 70% of its value and dropping to its lowest levels since January 2021. During the second half of June however, it managed to stabilize and defend the 1,000 psychological level, which provides the impetus for this month's aggressive rebound.
ETH/USD is off to a very strong start to the current week, gaining around 20% at the time of writing, as sentiment is in a better place and expectations for an outsized move by the Fed have cooled down, which contains the US Dollar.
Ethereum trades well above the EMA200 and now tries to take out the key 23.6% Fibonacci of the Q2 High/Low drop (1,606), which could accelerate the relief rally to the 38.2% mark at 1,984-2,000 region. Such a move could open the door for further advance towards 2,289, but we are cautious around its recovery prospects.
Immediate downside bias may have eased, but ETH/USD remains in highly precarious position. The Relative Strength Index (RSI) reached the most overbought levels of the year and the daily Ichimoku Clouds casts and imposing shadow.
As such, a return below the EMA200 and a covering of this week's gap (1,380-1,259) seem likely. A limited recovery could lead to another test of the 1K mark, although such an outcome has a high degree of difficulty at this stage.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.