Ethereum price is hovering inside a compact trading range for the third month. The recent developments suggest that a move outside the upper limit could soon arrive and push ETH to significant barriers.
Ethereum Price Finds Stable Base
Ethereum price is still trading within its range which extends from $2,158 to $3,282. The said barriers were set after ETH soared 52% between January 24 and February 10. As of this writing, ETH has moved lower and breached the $2,820 demand zone at $2,966.
After a quick recovery into the said demand zone, Ethereum price is using the 100-day Simple Moving Average (SMA) at $2,906 as a support level for climbing higher. However, the upswing needs to flip the 50-day SMA at $3,041 into a foothold for moving higher.
The Relative Strength Index (RSI) supports this recovery scenario. Ethereum price produced higher lows while the RSI created lower lows, indicating hidden bullish divergence.
This setup often resolves, causing the underlying asset to move higher. Therefore, a successful flip of the 50-day SMA will signal the start of an uptrend. In such a case, ETH will likely rally and retest the range high at $3,282.
However, if the bullish momentum continues to flow, Ethereum price could extend the run to mark the 200-day SMA at $3,478. ETH has been rejected at this level twice in the past three months. Therefore, a local top could form here if the buying pressure continues to diminish.
This run-up, in total, would amount to a 21% gain and is likely where a temporary top will be formed for ETH. In a highly bullish case, the smart contract token could revisit the $4,000 psychological level.
The decline in the supply of ETH on exchanges from 15.23 million to 14.86 million since April 4 supports this bullish outlook for the price of Ethereum. This outflow of 370,000 tokens from centralized entities is a bullish sign as it removes potential pressure from the sell side and also indicates that investors are bullish on Ethereum’s performance.
This indicator falls perfectly in line with the technical outlook that predicts a bullish future for Ethereum from both a short-term and a long-term perspective.
