After Rally, Ethereum Looks Primed For Profit-Taking
Crypto Briefing | Jul 24, 2022 01:14AM ET
Ethereum is at risk of a steep correction as the technicals anticipate a spike in selling pressure. Ethereum could be on the verge of a significant correction after gaining more than 400 points in market value over the past week. Still, on-chain data shows that ETH is sitting on a stable support level. Ethereum appears to be trading in overbought territory, which could result in a significant spike in profit-taking.
The number two cryptocurrency has surged nearly 40% over the past week. It rallied from a low of $1,180 on July 15 to hit a high of $1,650 today. However, ETH’s bullish price action appears to be weakening as the technical shows signs of exhaustion.
The Tom DeMark (TD) Sequential indicator has presented a sell signal on Ethereum’s daily chart. The bearish formation developed as a green nine candlestick. Increasing selling pressure could validate the pessimistic outlook and lead to a one to four daily candlestick correction.
Transaction history shows that Ethereum has formed a significant demand wall at $1,550. More than 586,000 addresses had purchased nearly 5.1 million ETH around this price level. Therefore, the bearish thesis could be validated if investors booked profits, potentially sending ETH below the $1,550 support barrier.
Failing to hold above this vital demand zone could trigger a 15% correction toward the 50-day moving average at around $1,300.
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Ethereum will likely need to print a decisive close above $1,650 to invalidate the bearish thesis potentially. Slicing through this resistance level could help prices surge toward the next significant hurdle at $1,800, where 1.14 million addresses currently hold over 800,000 ETH.
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