What Next After the Strong Weekend Rally?
Ethereum price rallied during the weekend and hit a high of $1,944. It then erased some of these gains and is currently trading at $1,812, which is the lowest level since Friday last week. In this ETH price prediction, I will forecast what will happen next.
What happened: Ethereum has had an excellent recovery recently. After dropping by more than 36% two weeks ago, the price rallied close to its all-time high during the weekend. This rally was part of the overall strong resurgence of other digital currencies. Bitcoin rose to $61,000 for the first time while the total market cap of cryptocurrencies rose to more than $1.7 trillion.
Ethereum price also rallied because of expectations of high demand as the Treasury Department starts to distribute the stimulus package. Analysts believe that many of the recipients of these funds will “plant” them into crypto, which is the best-performing asset class. This will lead to more demand for ETH because of its state as the second-biggest digital currency in the world.
Ethereum prices are also rising because of the improvement in the DeFi industry. Data by DeFi Pulse shows that the total value locked has increased from $40 billion last week to $45 billion today.
Ethereum Price Prediction
On Friday, I wrote that the ETH price would soon break-out. I pointed to the bullish flag pattern that was happening on the four-hour chart. This breakout happened during the weekend as the price rallied to $1,940. However, the price has retreated after the strong weekend rally.
Still, this price action was expected since many bulls have started to take profit. Also, after the strong rally, take-profits have been triggered, leading to a sell-off. Further, investors are now waiting for the Fed interest rate decision on Friday.
In my view, ETH price will resume the upward trend as bulls target the next all-time high at $2,040, which is 13% above the current level.
However, there are some limited risks that the price could also break-out lower since the price seems to be forming a head and shoulders pattern that is usually a bearish signal.
ETH price chart