Ethereum briefly bounced back from its critical support zone, but the bears resumed their attack. The second crypto by market cap has returned to an area that must be defended to prevent further losses.
Related Reading | TA: Ethereum Revisits $2.8K, Why Upsides Might Be Limited
At the time of writing, Ethereum (ETH) trades at $2,840 with a 3% loss in the last 24-hours.
The general sentiment in the market has been trending to the negative as Bitcoin, Ethereum, and larger cryptocurrencies experience more downside. However, some experts have been providing bulls with hope as long as the crypto market can sustain its current levels.
A pseudonyms trader pointed at ETH’s price current structure and determined that it can trend upwards from its present price. The trader looked at Ethereum’s On Balance Volume (OBV) and said it is “still alive”.
As seen below, this metric has been moving sideways since the start of April despite ETH’s price action. In that sense, the trader said the bullish biased remains as long as the OBV is capable of sustaining these levels.
Ethereum has been making higher highs and higher lows throughout 2022 and seems poised to bounce back to the former above $3,000, as the chart above shows. The pseudonym trader said:
You may think I’m still being biased bullish but I can’t call this chart bearish yet. OBV has held support on the daily, and we still have made a higher low. Break one of those and I lose my bullish thesis.
In the past, these long periods of consolidation in the price of Ethereum and its OBV have been followed by important rallies. In May and June last year, the price of large cryptocurrencies trended to the downside and then move sideways before re-entering uncharted territory.
The crypto market, as many operators have been pointing out across social media platforms, is moving in tandem with traditional equities. These assets are reacting to a negative earnings season for major companies and the possibility of an aggressive shift in monetary policy from the U.S. Federal Reserve (FED).
The Nasdaq 100 index, highly correlated with Ethereum and the crypto market, has been displaying weakness as it trends further downwards in 2022. As long as this index remains on a bearish trend, crypto seems unlikely to regain its strength.
Related Reading | Will The Ethereum Merge Skyrocket ETH?
However, current levels could operate as a short-term bottom for ETH and BTC prices. The pseudonym trader said the following about the current price action and its capacity to bounce upwards:
“Selling major support is one of the biggest mistakes traders make”. Look what happened last time people were selling Bitcoin. At least wait until support breaks if you want to sell.
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