- Ethereum price rebounded to a crucial resistance level on Thursday.
- The rebound mirrored the performance of other cryptocurrencies.
- Therefore is a risk that this rebound is a dead-cat bounce.
Ethereum price bounced back this week, reaching a high of $2,100, its highest point in nearly two weeks as the crypto market rallied. It was trading at $2,065 at press time, much higher than the year-to-date low of $1,757. So, is this the start of a new ETH price bull run or a mere pause?
ETH is soaring amid the ongoing crypto market rally, with Bitcoin and most altcoins in the green. This rally is happening as talks between the US and Iran resume and the stock market rallies.
Additionally, data shows that investors are buying the dip, with the spot ETH ETF inflows rising by $157 million on Wednesday. The increase was much higher than the previous day’s $9.2 million.
At the same time, Ethereum’s futures open interest soared to $27 billion, its highest level since February 6 this year.
READ MORE: XRP Price Prediction: Double-Bottom Forms as Key Metrics Jump
Ethereum Price Technical Analysis Points to More Downside
The ongoing Ethereum price rebound began after it formed a double bottom, a common bullish reversal pattern in technical analysis.
However, there are signs that the recovery will be brief. For one, it remains below all moving averages, while the Supertrend indicator is in red.
Additionally, the coin is yet to move above the key resistance level at $2,145, its lowest swing on June 23rd last year. As such, there is a risk that the rebound is part of a break-and-retest pattern, in which an asset drops below a key support level and then retests it. It is one of the most common continuation signs in the market.
The other risk is that Ethereum has formed a bearish flag pattern, consisting of a long vertical line and a horizontal channel. This pattern often leads to a strong bearish breakdown.
Therefore, a new Ethereum price bull run will be confirmed when the coin moves above the 50-day and 100-day Exponential Moving Averages (EMA). It will also happen when the two lines of the Percentage Price Oscillator (PPO) move above the zero line and when the Relative Strength Index (RSI) rises above 50.
Before that happens, there is a likelihood that the ongoing Ethereum price rebound is a dead-cat bounce as potential risks remain. Some of these risks include the potential US attack on Iran and Vitalik Buterin’s ongoing sale.
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