Ethereum price has rebounded after sliding to the lowest level since March 29 last week. ETH is trading at $2,577, which is 50% above last week’s low of $1,733. It has a market capitalization of more than $298 billion, which is still lower than its highest level of more than $500 billion.
Ether rebound is a clear evidence of the nature of correlation in the cryptocurrencies industry. In most cases, when a giant cryptocurrency like Bitcoin rises, other altcoins also tend to rise, and vice versa. Indeed, most digital currencies declined last week and bounced back this week.
Therefore, Ethereum price has bounced back in part because Bitcoin has also bounced back. At the same time, it has risen because of the strong performance of Decentralized Finance (DeFi), an industry that it dominates. The total value locked in the ecosystem has jumped to more than $60 billion. This is still below the all-time high of more than $90 billion but it is substantially higher than last week’s low of less than $45 billion.
Meanwhile, ETH has jumped because of the rising demand among the Reddit crowd. Indeed, data shows that comments in popular forums like R/Cryptocurrency have soared by more than 80% in the past few days. Finally, it has gained as some of the traders who were burned during last week’s sell-off buy the dips. So, what next for Ethereum prices?
Ethereum price prediction
The daily chart below shows that the ETH price has bounced back after it declined to $1,730 last week. A closer look at this chart shows that last week’s low was an important level since it was along the 61.8% Fibonacci retracement level. In technical analysis, this is usually an important price where the price finds some support.
We also see that Ethereum price is oscillating at the 50-day and 100-day exponential moving average and is slightly below the 38.2% Fibonacci retracement level. This is a sign that this relief rally is yet to be confirmed. A confirmation will happen when the price manages to move above the two moving averages. The currency also formed a hammer pattern on May 23rd.
At this stage, the outlook is neutral. A bullish breakout will be confirmed if the currency manages to move above the 50-day moving average and the 38.2% Fibonacci retracement at around $2,800.
However, a drop below the 50% retracement at $2,245, will signal that there are still sellers in the market, who will be keen to push it to last week’s low of $1,730.