Ethereum (ETH) is on the cusp of potentially climbing higher, drawing attention from breakout traders.
However, the journey upward isn’t straightforward, as market dynamics often see an initial move in the opposite direction to gather liquidity.
This necessitates patience among ETH enthusiasts eager for gains.
The price of Ethereum has recently carved out a trading range, plummeting 25% from $3,054 to $4,095 between March 11th and 20th.
Presently, ETH has surged past the mid-point of this range, stationed at $3,574, signaling a promising, albeit volatile, ascent.
This abrupt price movement, while tempting for traders, warrants caution.
The cryptocurrency market is notorious for its swift reversals following initial breakouts, aimed at amassing liquidity beneath critical thresholds.
READ MORE: BNB’s Rally Narrows Gap with Ether Amid Mixed Market Signals and ETF Outflows
Since hitting its range low on March 20th, ETH has been marking progressively higher highs, suggesting the possibility of a retracement following a breakout above $3,574 and $3,658.
A dip to $3,461 may offer a strategic entry point for long positions, especially if Bitcoin (BTC) completes its liquidity accumulation phase.
Under these conditions, ETH could surge, surpassing the $3,658 barrier and potentially retesting the significant $4,000 level.
A further push could see it reaching $4,095, especially under strong selling pressure.
Conversely, should Bitcoin falter in its recovery post-liquidity collection, it could drag altcoins, including Ethereum, downward.
A drop to Ethereum’s range bottom at $3,054 and a subsequent shift of this level to resistance could negate the optimistic outlook for ETH, hinting at a continuation of the downward trend.
Such a scenario might precipitate a near 2% fall in Ethereum’s price, potentially bringing it down to the psychologically important $3,000 mark.
This forecast underscores the nuanced and speculative nature of cryptocurrency trading, emphasizing the need for caution and strategic patience among investors.
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