After experiencing a flash crash to $2,125 on February 2, Ethereum (ETH) swiftly rebounded to a high of $2,905, triggering liquidations for both long and short positions amid a highly volatile trading period. While the token currently hovers around $2,700, crypto analyst Ali Martinez has identified a critical support level that must hold for Ethereum to sustain its bullish momentum.
Ethereum Must Hold This Support Level For Bullish Momentum
In a post on X today, seasoned crypto analyst Ali Martinez pinpointed the $2,238 to $2,614 price range as Ethereum’s ‘most important’ support zone. According to Martinez, approximately 12.18 million crypto wallets acquired 63.07 million ETH within this range. The analyst further emphasized:
It doesn’t matter whether Ethereum is inflationary, deflationary, or whatever. What truly matters is whether it holds this support level.
To understand why this price level is important, it shows that a significant number of investors and traders bought ETH within this range. When a large number of wallets hold assets at similar price levels, this creates a zone of support because these holders are less likely to sell at a loss, thereby providing a floor for the price.
Support levels also carry psychological weight in trading. Investors who bought ETH within this range tend to perceive it as a fair valuation, increasing the likelihood that they will defend this level by either holding or accumulating more ETH. This collective sentiment can provide stability and potentially prevent deeper price drops.
Fellow crypto analyst Ted echoed similar sentiments regarding Ethereum’s price trajectory, affirming that the long-term outlook remains positive. Ted remarked:
ETH still holding the uptrend trendline and recently bounced back from a crucial support level. Along with that, BlackRock is buying $250M+ worth of ETH, which will soon reflect in its price action. $10K+ ETH is programmed this cycle.
Additionally, Martinez highlighted the emergence of a potentially bullish inverse head-and-shoulders pattern on Ethereum’s daily chart. For this pattern to validate a bullish breakout, ETH must maintain support above $2,700. If successful, the next upside target could extend as high as $7,000.
Could Ethereum Price Be Heading Downwards?
Despite these bullish indicators, concerns persist over Ethereum’s price action, as the digital asset has significantly underperformed compared to cryptocurrencies like Bitcoin (BTC), SUI, and XRP over the past year. A recent report indicates that large ETH holders may be gradually losing confidence in the asset.
Moreover, recent analysis suggests that Ethereum may be at risk of an extended downturn in the coming days. At press time, ETH is trading at $2,774, down 0.9% over the past 24 hours.
Featured Image from Unsplash.com, Charts from X and TradingView.com
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