ETH price technical analysis (31 May-6 June): a rally to $3,000 looks plausible

Ether could start a relief rally in the next few days, which may push its price to $3,000

Billionaire Carl Icahn could be gearing up to invest in cryptocurrencies. While speaking to Bloomberg TV recently, Icahn said he is bullish on Bitcoin and Ethereum as they can act as a store of value. He said he liked Ethereum more because it “has two things, you can use it as a payment system and you can use it as a store of value”. On being prodded about the amount he wants to invest, Icahn gave a ballpark figure of a billion to billion and a half dollars.

Bianco Research president Jim Bianco is also bullish on Ethereum and expects its price to be much higher in the future. While speaking to CNBC, Bianco said that crypto investors should be ready for increased volatility “in the next several months or year or so.”

The renowned investor Stanley Druckenmiller is sceptical about Ethereum, however. He doubted that it would hold its positions. In an interview with The Hustle, he likened it to “Myspace before Facebook. Or maybe a better analogy is Yahoo before Google came along.”

Experts seem to be divided in their opinion on ether’s fundamentals. But what do the charts project? Has ether bottomed out or could it fall further? Read ether’s price trend analysis to find out.

Ether price technical analysis: Weekly chart

Ether price technical analysis

The bulls bought the dips last week and tried to start a recovery. However, the relief rally turned down from $2,914.63, indicating that bear traders are selling at higher levels. Ether’s price rose 13.72% to finish last week at $2,387.82.

A minor positive is that the bull traders did not allow the price to dip below the 20-week exponential moving average (EMA). This suggests that traders are defending the 20-week EMA aggressively.

If buyers can clear the hurdle at $2,914.63, the ETH/USD pair could rally to the 61.8% Fibonacci retracement level of $3,368.06, where it is likely to face stiff resistance from bear traders.

But if bull traders do not lose much ground from $3,368.06, the possibility of a re-test of the all-time high increases.

On the other hand, if the price turns down and plummets below the 20-week EMA, the pair could drop to $1,730.31. If this support also cracks, the decline may extend to the 50-week simple moving average (SMA).

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Ether price technical analysis: Daily chart

ETH price chart

The moving averages have completed a bearish crossover and the relative strength index (RSI) is in the negative zone, indicating bear traders have the upper hand. 

However, ether’s price is forming an ascending triangle pattern, which will complete on a breakout and close above the overhead resistance at $3,000.73. This bullish setup has a target objective of $4,271.15. 

On the other hand, if the price turns down from the 20-day EMA, the bear traders will attempt to sink the price below the trendline of the triangle. If they manage to do that, the bullish pattern will be invalidated and this may trap several aggressive bull traders who bought anticipating an upside breakout.

The first support on the downside is $1,730.31. If this support cracks, the selling could intensify and the pair may start the next leg of the downwards trend.

ETH price technical analysis: Trading this week

Ether remains in a downwards trend but the bull traders are trying to stage a strong recovery, which is likely to gain momentum on a breakout and close above $3,000.73. 

On the other hand, if the price heads down and slips below $2,274, the pair could start a deeper correction. Traders could, therefore, consider buying on strength rather than bottom-fishing on dips.

Ethereum to US Dollar
Daily change
1297.11
Low: 1290.95
High: 1315.95

FURTHER READING: How to trade Ethereum: the ultimate guide

FURTHER READING: What is ether? Your simple guide to the cryptocurrency

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