Ethereum’s price has recently experienced a massive spike following the news of its ETF being approved.
While the trend is bullish, there is still one obstacle left, as the asset has failed to overcome the coveted $4,000 level.
Technical Analysis
By TradingRage
The Daily Chart
As the daily chart demonstrates, Ethereum’s price has been correcting in a large descending channel for the last few months. Yet, the asset finally broke the channel and the $3,600 resistance level to the upside last week, following the ETF news.
The market is currently testing the $4,000 resistance zone, with the Relative Strength Index on the verge of entering the overbought region. While the RSI values are worrying, the market could still break above $4,000 in the short term before experiencing a potential pullback.
The 4-Hour Chart
On the 4-hour timeframe, it is evident that the market has begun to rally ever since breaking above the channel’s midline and the $3,000 level. While the market has been creating higher highs and lows recently, the RSI has been creating lower highs, pointing to a potential bearish divergence.
Yet, as long as the RSI remains above 50%, the momentum will be in favor of a bullish continuation, and the price could break above the $4,000 mark.
Sentiment Analysis
By TradingRage
Funding Rates
Ethereum’s price is currently rallying aggressively toward the recent high of $4,000. While it is likelier than before for ETH to break above $4,000 and move toward a new all-time high, futures traders seem pessimistic, and this is not a bad sign.
This chart demonstrates the Ethereum funding rates. This metric is one of the best futures market sentiment evaluation resources. Positive values indicate bullish sentiment and negative ones are associated with a bearish atmosphere.
While ETH’s price is currently testing the $4,000 resistance level, funding rate values are significantly lower than what they were in March when the price was once again around $4,000. This is a good sign, indicating that the futures market is not overheated this time around, and there is a lower probability for a long liquidation cascade compared to before.
