Ether price analysis 17 Jan: Is the correction over?

• Updated

Ether may remain weak in the short term

Ether’s rebound continues to face selling at higher levels, indicating that the sentiment remains negative and traders are booking profits on rallies.

While the several blockchains that have been dubbed as “Ethereum killers” have been outperformers in 2021, Joey Krug, co-chief investment officer of Pantera Capital, said in a recent interview with Bloomberg that the Ethereum network will remain dominant in the financial sector. Because of this, more than 50% of global monetary transactions may happen on the Ethereum network over the next 10 to 20 years.

Coindesk highlighted that more than 9 million ether, valued at more than $29bn (£21.2bn) have been staked in the Ethereum 2.0 deposit contract. The top four depositors cumulatively account for 47.50% of the total ether staked. Lido (the decentralised and liquid alternative to staking pools) is the largest contributor at 18%. The rise of Lido and other such entities is a positive sign as that could keep the decentralisation of the network from being threatened.

The popularity of a token also tends to attract hackers. The notorious North Korean crypto hackers stole roughly $400m in cyber attacks in 2021, according to a report by Chainalysis. Ether tokens accounted for the majority of the stolen funds, amounting almost three in five of the total hacks. 

Will the dips be purchased and could ether go up? Read the ETH price analysis to find out.

Ether weekly chart
Ether weekly chart – Credit: Currency.com


Ether price technical analysis: weekly chart

ETH’s price rebounded off the 50-week simple moving average (SMA) last week, indicating that the bulls are attempting to arrest the decline at this level. The ETH/USD pair rose 6.30% to end the week at $3,360.36.

The buyers will now attempt to push the price to the 20-week exponential moving average (EMA), where they may encounter stiff resistance by the bears. 

If the price turns down from the current level or the 20-week EMA, it will suggest that traders continue to sell on rallies. That will increase the possibility of a break below the 50-week SMA. If that happens, the pair could start a downward move toward the psychological level at $2,000.

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Conversely, if the relief rally rises above the 20-week EMA, it will suggest that the corrective phase could be over. The buyers will then attempt to push the pair to $4,150 and then try a retest of the all-time high of $4,868.91.

Ether daily chart
Ether daily chart – Credit: Currency.com


Ether price technical analysis: daily chart

ETH’s price reached near the 20-day EMA on 16 January but the bulls could not push the price above it. The downsloping moving averages and the relative strength index (RSI) in the negative zone indicate that the bears have the upper hand.

If the price turns down from the current level, the bears will again try to pull the pair to the support line of the channel. A break and close below the channel could result in panic selling. The pair could then drop to $2,651.04 and later to $2,443.

Contrary to this assumption, if the price turns up and breaks above the 20-day EMA, it will suggest that the bears may be losing their grip. 

However, the sellers are unlikely to give up easily and may again pose a stiff challenge at the resistance line of the channel. A break and close above this resistance will indicate a possible change in trend. The pair could then rise to the psychological level at $4,000.

Ether: buy or sell this week?

Ether’s price analysis shows that bears are defending the zone between the 20-day EMA and the resistance line of the channel. A break and close above the channel will indicate a possible change in trend. Conversely, if the price turns down from the current level, a drop to $2,936.30 is possible.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision. 

Ethereum to US Dollar
Daily change
1797.71
Low: 1786.1
High: 1963.11

Further reading

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