Ethereum traders are on high alert following a massive whale transaction involving 40,000 ETH. It was valued at approximately $146.08 million and transferred from an unknown wallet to the Bitfinex exchange. Will Ethereum price react to this news?
The transfer has caused uncertainty to Ethereum’s ongoing bullish momentum, which has seen the cryptocurrency consolidate above $3,600 in recent weeks. Historically, such large transfers have been linked to potential sell-offs, sparking fears of increased volatility in the short term.
Ethereum’s Bullish Momentum Tested by Whale Activity
A Golden Cross was confirmed on the 4-hour chart on the condition that the 13-period moving average crossed above the 49-period moving average. This is a bullish signal which means that the short term trend is positive and price is likely to move higher in the near future.
The Golden Cross holding, Ethereum has retained its price above these Moving averages which enhances the traders’ confidence. Ethereum has been consolidating near its recent highs, trading at $3,642 at the time of writing.
However, with the recent whale transfer, the future of Ethereum in following this path is uncertain, as traders are unsure if this move is a sign of a sell-off. This is because Ethereum has not been able to firmly breach the resistance level of $3,645 in the market.
Support Levels Hold the Key Amid Consolidation
On the price chart of Ethereum we can see clear patterns of support and resistance levels, which will shape the further movement. First support is found at $3,627 which coincides with the 13-period moving average. This level has offered short term stability and has enabled Ethereum to cling above key levels.
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Just below this, a strong support level can be seen at $3,528, which is the 49-period moving average and a previous range. A breakdown below this level could lead to a deeper correction towards $3,406 most probably buyers would come in at this level.
On the positive side, Ethereum’s barrier at $3,645 has been quite sturdy to break. ETH may break the resistance at $3,300, opening the path towards the psychological level of $3,700. This would pave way for further buying signals and a continuation of the bullish trend.
RSI Reflects Momentum but Warns of Overbought Conditions
The Relative Strength Index (RSI) on the 4-hour chart is at 63.64 to show that there is strong buying pressure. RSI value above 50 means that bullish sentiment is in control, hence confirming that the upward trend in Ethereum continues.
However, the RSI has pulled near the overbought level of 70, which has been a typical indicator of short term price corrections. If the RSI approaches or goes above 70, we can expect a temporary pullback in Ethereum price. This can pull the asset down to lower support levels.
On the other hand, if RSI remains range bound in the bullish area it could be an indication that there may be room for more gains so long as the market can handle the whale induced volatility.
Analyst’s View: Higher Targets in Sight
CryptoFeras remains bullish on Ethereum stating that it can sustain its upward momentum as long as it finds support above $3,350-$3,400. The analyst pointed out that Ethereum has been outperforming Bitcoin, which has further supported the bulls.
According to CryptoFeras, the first target is the $4,000 level which is a psychological level that Ethereum must break through to show that it is in an uptrend. If Ethereum flips $4,000 into support, based on Fibonacci extension levels, ETH could rally to $4,493, $4,758, and $5,138.
