Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been making significant strides in recent weeks, riding on the wave of positive developments in the crypto industry.
Over the past seven days, Ether has witnessed a remarkable surge of 16%. However, its primary rival, Bitcoin, has outpaced it with a 20% surge during the same period. Notably, this surge saw Ethereum breaking key resistance at $1,745, sparking optimism among investors and analysts.
Despite these gains, Ethereum’s upward momentum is now at a critical juncture. The crypto community is closely monitoring a formidable resistance level at $1,960, which has raised concerns.
On Thursday, popular crypto analyst Ali Martinez took to Twitter to shed light on this impending challenge, stating, “When will Ethereum break out? Well, you may need to wait for $ETH to overcome the huge supply wall at $1,960. Here, 1.14 million addresses bought nearly 33 million ETH, according to data from Into the Block.”
This said resistance level, often referred to as a “buy wall,” represents a level where a substantial amount of Ethereum was bought in the past. Investors who bought then may be inclined to sell their Ethereum at this price point, which can act as a significant barrier to further price appreciation.
Interestingly, the close correlation between Ethereum and Bitcoin has been evident, where changes in one frequently impact the other. In another tweet, Martinez pointed out that Bitcoin’s potential 5% correction to $33,000, driven by its formation of an ascending triangle on the hourly chart, a move that could trigger a similar selloff in Ethereum.
Adding to Martinez’s views, crypto analyst ‘Cryptotony’ also presented a bearish perspective on Ethereum, telling his 346,000 X followers that the cryptocurrency might gain momentum and test the $2,500 resistance zone before entering a distribution phase and possibly decline leading up to the next halving event.
Another analyst, ‘Cryptonary,’ emphasized the significance of Ethereum’s ongoing test, stating that it was crucial to determine whether the bulls could break through the resistance at $1,960 or if Ethereum would echo Bitcoin’s overbought signals.
Notably, the pundit’s technical analysis revealed that Ethereum had been oscillating between support at $1,745 and resistance at $1,823-$1,853, with no clear breakout yet. Additionally, he noted that the daily Relative Strength Index (RSI) was overbought but not as extended as Bitcoin’s.
That said, as Ethereum faces a pivotal moment along the $1,960 resistance level, the outcome of this test will determine whether Ethereum can continue its recent bullish trend, plunge or face a period of consolidation.
Ether was trading at $1,796 at press time after a 0.32% increase over the past 24 hours.