Ether price analysis 22 Nov: Could $4,000 crack this week?
Ether (ETH) may extend its correction in the near term
Time Magazine and Galaxy Digital recently announced a partnership to launch a weekly newsletter entitled ‘Into the Metaverse’ and also create the Time 100 Companies category for metaverse-related firms.
The 98-year-old publication said the transaction would be conducted in ether (ETH) and Time will hold ETH on its balance sheet – the first major media company to do so.
“Over the next decade, the metaverse will become an increasingly important part of the world economy; our physical and digital realities are already becoming hard to distinguish,” said Mike Novogratz, founder and CEO of Galaxy Digital.
The institutional activity seems to have picked up in ether’s options market, with buying in the $5,000 and $6,500 strike-call options, according to Patrick Chu, director of institutional sales and trading at crypto over-the-counter (OTC) trading firm Paradigm.
Even-higher strikes of $7,000, $10,000 and $12,000 have resulted in buying.
Another bullish voice was that of Real Vision co-founder and CEO Raoul Ral, who tweeted on 17 November that he believed ether could rally between 100% to 300% into the year-end.
Will lower levels attract buying and could ether go up? Read the ETH price analysis to find out.
Ether price technical analysis: weekly chart
The uncertainty of the Doji candlestick pattern resolved to the downside as the bears pulled ETH’s price back below the breakout level of $4,381.71. The ETH/USD pair dropped 7.90% to end the week at $4,261.47.
A minor positive was that lower levels attracted buying, as seen from the long tail on last week’s candlestick. The moving averages continue to slope up and the relative strength index (RSI) is in the positive zone, indicating that the bulls have the upper hand.
If the price turns up from the current level, the bulls will make one more attempt to push the pair above the overhead resistance at $4,381.71. If the bulls maintain the price above this level, a retest of the all-time high at $4,868.91 is possible.
Contrary to that, if the price turns down from the current level or the overhead resistance, the bears will try to sink the pair to the 20-week exponential moving average (EMA). A strong rebound off this level will indicate that sentiment remains bullish and traders are buying on dips.
But if the 20-week EMA gives way, the selling could intensify and the pair could drop to the 50-week simple moving average (SMA)
Ether price technical analysis: daily chart
ETH’s price broke and closed below the 20-day EMA on 16 November, indicating a change in the short-term trend. The selling continued and the pair breached the 50-day SMA on 18 November. The bulls purchased the dip, resulting in a sharp rally on 19 November.
However, the recovery faced stiff resistance at the 20-day EMA. This suggests that the short-term sentiment has turned negative and traders are selling on rallies.
The price has since dipped back to the 50-day SMA. If the bears pull the price below $3,950, the selling could accelerate and the pair could drop to the next support at $3,400.
The moving averages are on the verge of a bearish crossover and the RSI is in the negative zone, indicating an advantage to the bears.
This negative view will be invalidated if the price bounces off the current level and breaks above $4,564. The pair will then try to rise to the psychologically important level of $5,000.
Ether: Buy or sell this week?
Ether’s price analysis shows that traders are selling on rallies. A break below $3,950 could start a deeper correction towards $3,400. The bulls will have to push and sustain the price above $4,564 to indicate that the corrective phase may be over.
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.