Ethereum’s trading range is beginning to tighten up significantly as it looks ahead to its next major move.
The world’s second largest cryptocurrency has been somewhat stable since March 13’s desperate descent to the downside, which saw price tumble all the way to $88.
Three weeks later and Ethereum has bounced back remarkably with it now trading just below the $133 level of resistance, 47% higher than it was earlier this month.
Ethereum now needs to utilise the lack of volume by breaking out and floating above $133 as it attempts to test the daily 22 exponential moving average (EMA).
With all key moving averages sloping to the downside it draws attention to the recent death cross, which saw the 50 EMA cross the 200 EMA to the downside for the first time since August 2019.
The previous cross preceded a major correction in the price of Ethereum as it dropped by more than 50% in the following four months.
A similar pullback from this level would take Ethereum to a gruelling three-year low of $65, although support is expected at around $80.
However, while the moving averages paint a rather bearish picture, the fact that Ethereum has bounced back so strongly in light of global economic turmoil will give confidence to investors and traders.
Establishing a platform above the psychological level of $100 will be key for Ethereum over the next 12 months with analysts suggesting that it will perform well following the Bitcoin halving event in May.
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Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.
Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy-in to his proposal.
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