Will Ethereum continue its rally? Data analysis

Oct 31, 2022
04:10
2 min reading

Choise.com team

Will Ethereum continue its rally? Data analysis

Ethereum has been one of the most consistent gainers for over 10 days now, surging more than 25%.ETH bulls did a pretty good job at bringing the price from the $1,300 level to $1,585. Even though Ethereum price charted quite a run, the $1,600 resistance halted the upward trajectory.

Ethereum inflows soar

There are many reasons behind ETH weakening price momentum.

Firstly, the active Ethereum addresses have seen a continued decline, making lower lows on a daily chart. Declining active addresses present waning market confidence from participants. That said, another worrying trend is that the number of Ethereum addresses holding 10,000+ ETH just reached a 7-month low of 1,158.

According to Glassnode Alerts, this could mean that whale entities have been taking profits during the recent pump and reduced their holding as Ethereum price action weakened.

Furthermore, data from CryptoQuant suggests that whales’ deposits on the exchange caused prices to rise. Interestingly, exchange inflow (mean) saw a massive rise as Ethereum prices saw a pump.

The recent upswing can be thought of as a deliberate pumping event from the bear market, which could act as an exit move before a bigger fall.

Local ETH top reached?

On October 31, as another month came to an end, ETH percent of addresses in profit (7d MA) reached a 1-month high of 56.565%. With so many addresses in profit, traders could be encouraged to book some profits in the crypto market.

That said, Ethereum NVT Signal (7d MA) also reached a 1-month high of 1,604.988. While a high NVT Signal indicates that investors are pricing the asset at a premium, it often coincides with local market tops.

In the case of NVT making higher highs during bearish over-extensions, the same could mean that selling opportunities arise during peak euphoria.

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Ethereum price analysis

Ethereum remained in a positive zone above the $1,450 and $1,500 resistance levels. ETH gained pace and traded above the $1,550 resistance zone, with a close above the 100 hourly simple moving average.

The price cleared the$1,600 resistance and traded to a new multi-week high at $1,664. Recently, there was a downside correction below the $1,620 and $1,600 levels. Ether price even declined below the 23.6% Fib retracement level of the upward move from the $1,485 swing low to $1,664 high.

It is now trading above $1,550 and the 100 hourly simple moving average. There is also a key declining channel forming with resistance near $1,600 on the hourly chart of ETH/USD.

Source:ETHUSD on TradingView.com

Technicals

Hourly MACD is now gaining momentum in the bearish zone

Hourly RSI is now below the 50 level

Support Levels – $1,565, $1,550, $1,500

Resistance Levels – $1,600, $1,650, $1,665, $1,700, $1,720

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