ETH price reacted to Grayscale Investments’ triumph over the Securities and Exchange Commission (SEC) on Tuesday, climbing from support at $1,630 to highs above the resistance at $1,700. A new weekly high was achieved at $1,740 before the momentum waned allowing the ongoing retracement at $1,715.
Can ETH Price Extend Rally To $2,000?
Ethereum was not spared by the widespread selling pressure nearly a couple of weeks ago, which saw the most prominent smart contracts platform plunge to $1,540. A period of consolidation followed the storm, as bulls set camp at $1,630.
Investors sought fresh exposure to Ether as the crypto market generally rebounded, thanks to Grayscale’s victory against the SEC. The largest digital assets management firm moved to court challenging the SEC’s decision that prevented it from converting its Bitcoin Trust (GBTC) product to a spot exchange-traded fund.
The longstanding court battle saw Grayscale appeal to the appeals court, culminating in a landmark win against the SEC. Now that the bottleneck is over, the SEC is required to reevaluate Grayscale’s earlier proposal.
Following the win, Bitcoin price gained ground from support at $26,000 to highs above $27,000. Ethereum and the rest of the altcoins joined in the surprise rally leading to a 4.4% bump in the crypto market cap to $1.1 trillion.
Support at $1,700 is required to hold in place to confirm the possibility of the rally stretching to $2,000. This higher support would also encourage investors waiting on the sidelines to join the impending run-up.
However, traders should proceed with caution keeping in mind the presence of sellers in the narrow range between $1,740 and $1,750. The 200-day Exponential Moving Average (EMA) makes this resistance worth watching as two scenarios are likely to play out.
ETH/USD daily chart | Tradingview
A break above $1,750 would increase the chances of Ethereum climbing to $2,000. However, if the ongoing correction steadies, the risk of losses below $1,700 would increase significantly with ETH price likely to retest the support area between $1,600 and $1,630.
A buy signal from the Moving Average Convergence divergence (MACD) indicator adds credence to the bullish outlook, which means buyers have the upper hand after all.
If investors hold firmly and keep ETH price from dropping drastically, a rebound could stem from the immediate support at $1,700 – the 100-day EMA (blue).
ETH Price Far From Confirm Bull Run
Despite the rally to $1,740, Ethereum holds below all the key moving averages on the daily chart, starting with the 50-day EMA (red) which has formed a confluence resistance with the 200-day EMA (purple) at $1,775 and the 100-day EMA (blue) at $1,800.
ETH/USD daily chart | Tradingview
If the 50-day EMA completes the death cross pattern as it crosses beneath the 200-day EMA, the downtrend may carry on and possibly extend the losses to the levels explored in the previous ETH price analysis.
The Relative Strength Index (RSI) is also on the verge of a correction after gaining ground from the oversold region to the midline in the neutral zone. Another retreat means that sellers never left and that they are ready to resume control.
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