Ethereum price has sent a bullish signal on the four-hour chart in the form of a bullish divergence from the Relative Strength Index (RSI). This setup points to an ETH recovery bringing a move to areas above the $2,000 psychological into the picture.
After being turned away from the $2,142 local high, Ethereum embarked on a downtrend that was halted around the $1,800 support zone. Ether has then been displaying range bound movement producing a series of lower highs and lower lows, while the Relative Strength Index (RSI) produced lower highs. This resulted in a non-conformity scenario referred to as a "bullish divergence".
A bullish divergence is a technical setup that suggests that the bulls have not given up on pushing the price higher. This formation from the RSI forecasts an upward recovery in the Ethereum price. The levels that buyers likely have their eyes on is the $1,973, which is the 50% Fibonacci retracement level of the recent downturn as well as the 78.6% Fibonacci level at $2,069
Shattering this resistance will allow Ether's price to tag the $2,100 hurdle and later the $2,142 swing high. Such a move would bring the total gains to 18% for the ETH traders.
Apart from the bullish divergence from the RSI, the price sat on a four-hour demand zone, as shown on the chart above. This was the area stretching from $1,640 to $1,760 that could provide the oomph required by the buyers to scale ETH higher.
Note that the last time the price consolidated within this region between March 12 and March 28, it went on to surge 22% to 10-month highs close to $2,150. Therefore, even if Ethereum drops back into this level, demand pressure from this zone could lift the price back up, avoiding the price from tanking below the said level.
On the downside, if bulls fail to lift Ethereum up and sellers tighten their grip instead, it could spell doom for the largest altcoin by market value. If this happens, ETH could slide below the 23.6$ Fibonacci retracement level at $1,805 and back into the bullish breaker, described above.
In highly bearish cases, a four-hour candlestick close below $1,640 would invalidate the bullish thesis for Ethereum price and potentially trigger a correction to $1,531 and $1,470 defense levels.
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