Negative sentiment is gradually building in the overall cryptocurrency market once again, with major digital assets such as Ethereumthe second largest cryptocurrency, experienced a notable setback that slowed its renewed bullish price momentum. Given the sudden decline, many cryptocurrency analysts believe that the altcoin could face an extended downward move soon.
Ethereum is set to enter a correction phase
IC News, a media platform, took a deep dive into the current price action of Ethereum, an offer Insights into its near-term performance. After a thorough examination, the platform highlighted that ETH may be on the verge of a temporary corrective phase as market momentum declines following recent gains. The platform’s prediction is due to signs of overbought conditions and profit taking by retail and Institutional investorswhich may affect the stability of the value of crypto assets.
According to IC News, Ethereum is currently approaching a critical resistance area at the $3,600 price level, where there is plenty of supply and room for profit taking. Considering how strong this resistance level is, the platform claims that there is a good chance that a short period of correction will occur soon to limit the buying pressure.
Furthermore, IC News points out that in order to create a more stable uptrend for Ethereum, the market will have to pull back towards the 200-day moving average (MA).
While the analysis may raise concerns about the altcoin’s short-term trajectory, a pullback could be healthy for the asset. This is because the altcoin may create new strong support levels during the correction phase and strengthen its base for future price expansion. It can also present numerous buy signals and opportunities for new and seasoned investors, allowing them to reevaluate their positions in light of declining market sentiment.
Despite the sudden price drop, digital assets are constantly showing upside potential in the broader outlook, shares market expert and trader, Captain Vibeck. Prediction The medium-term price target for Ethereum is at $5,450.
So far, Ethereum continues to move within an expanding wedge pattern, which is a leading indicator of growing momentum. Meanwhile, Captain Vaibek A Go From a bullish formation in the coming days, which will spark another big rally for ETH, potentially reaching $5,450 in the medium term.
ETH now outperforms the US banking giant
Ethereum’s recent rise The altcoin has led to crucial milestones in the past few days, such as surpassing financial giant Bank of America in terms of market capitalization. Sunday, Ethereum It saw its total market capitalization rise by more than 5%, to a total of US$383 billion, surpassing Bank of America’s market capitalization by as much as US$40 billion.
IC News male The high valuation of crypto assets compared to Bank of America reflects a change in the dynamics of the traditional sector as the adoption of blockchain technology begins to grow beyond traditional banking systems.
Featured image from Unsplash, chart from Tradingview.com