ETH's rally has become a suppressed misfire as fears of a sharp price correction hang over the cryptocurrency market. ETH looks as if it may be losing its latest uptrend. Is it time to get out?
Strong ETH is crucial for altcoins
When we talk about altcoin seasons, one of the main factors for this to happen is a strong uptrend in the price of ETH. This was the case starting around mid-October 2023, with ETH breaking through the major resistance level of $2,000 and then $2,130.
The rally continued upwards, hitting the $2,700 resistance level before getting rejected and moving all the way back to the bullish trendline. This is a 79% gain, and while ETH’s performance has mostly been outperformed by BTC and many other altcoins, it’s not a bad gain for the second-ranked cryptocurrency.
Source: Coingecko/Trading View
ETH rally in danger
This rally is in danger as the price is currently consolidating below the trendline. Wednesday’s daily candle closing below has already confirmed the breakout and now Thursday’s candle has also confirmed it and led the price lower.
Source: Coingecko/Trading View
Very strong price support below
Zooming out to the weekly timeframe, the support awaiting ETH price below is very encouraging. Strong support could hold the price at $2,100, and below this level is the support of the entire price structure of ETH established so far in this bull run, which is around $2,000.
The ascending triangle is an extremely strong support level, and if ETH breaks through this support level and stays below it, the ETH bull market, and even the bull market in the entire altcoin industry, will be in serious danger.
That being said, markets do tend to work this way. Once a breakout is achieved, the subsequent rally may push prices higher, which may last for weeks, months, or even years, but eventually prices may fall to confirm the previous price structure, and then may rise higher again.
If Bitcoin and the rest of the cryptocurrency market are in a correction phase, then it stands to reason that ETH price will follow suit. While a correction may be painful for many traders and investors, it is much healthier for the overall bull market than an unsustainable parabolic price surge. #ETH #BTC
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