- Even after a slight pullback from the local highs of $330, Ethereum remains one of the best-performing cryptos of the past week.
- According to Coin Market Cap data, the asset is trading for $324 on leading margin exchanges at the moment.
- This resilience has convinced some analysts that a move to $360, a critical resistance, is imminent.
- Yet an analyst says that with ETH’s inability to hold $325, the top cryptocurrency faces a potential pullback.
- Ethereum may be boosted in the longer run by positive developments around ETH2, an upgrade to the blockchain that will promote usability.
Ethereum Is Facing Down a “Deepish Pullback” as Key Resistance Holds
According to a trader, Ethereum’s recent inability to hold above ~$325 on the one-day chart means it is rejecting a crucial resistance. The resistance in question is the range equilibrium of the peak of 2019’s rally.
Should ETH fail to push through this level, it will likely undergo a “deepish pullback” that is “much needed.”
“$ETHUSD – Looks to be rejecting off the previous range level mid on the daily. H4 looks topped for now. Probably see a deepish pullback.. a much needed one,” the trader wrote in regardfs to the chart below.
Chart of ETH's price action over the past year with analysis by TraderXO (@TraderX0X0 on Twitter). Chart from TradingView.com
The trader aforementioned isn’t the only market commentator suggesting Ethereum may soon undergo a retracement.
As reported by Bitcoinist previously, blockchain analytics firm Santiment recently divulged three core on-chain and social metrics suggesting ETH could drop. They are as follows:
- Mentions of “Ethereum” on social media platforms (namely Twitter) have spiked to one-year highs. Previous ETH price tops were marked by an explosion in social volumes as we just saw.
- Much of these recent mentions were positive in terms of their sentiment. Periods of extremely positive sentiment have coincided with previous tops. This also lends to the theory that the cryptocurrency market trades against the majority.
- Cryptocurrency platforms saw a spike of ETH deposits, suggesting that traders wanted to cash out of their investments.
Ethereum exchange inflows chart from Santiment
Positive Fundamentals Could Act as Boon
What may boost Ethereum, though, is positive developments around ETH2.
Just this week, the Ethereum Foundation announced that it has launched an ETH2 Validator Launchpad with ConsenSys and Deepwork Studio.
“We’re releasing it now so that you can keep track of, and make deposits into, the upcoming Medalla multi-client testnet. But we’ll continue to fine-tune the interface in the run-up to mainnet launch.”
This system confirms that the upgrade, which will implement Proof of Stake in Ethereum, is drawing near.
Analysts expect the launch of ETH2 to drive record levels of demand for ETH as investors attempt to become validators on the network.
Featured Image from Shutterstock Price tags: ethusd, ethbtc Charts from TradingView.com Analyst Is Predicting a "Deepish Pullback" For Ethereum as Price Fails at $325