The answer to this question is not that simple. The local bottom might be in, but the overall bottom of the whole cycle might not be. What does this mean? Let’s look at the chart first.
1D chart of Ethereum, Source: Author’s analysis, tradingview.com
Is a local bottom in?
The local bottom simply means a bottom that is given by the time range of few days to few weeks. As of now, it looks probable that the local bottom might be in, or at least close, which means that an upward move might be coming.
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Even the overall chart shows that 1 700 – 1 800 USD levels is a strong resistance for Ethereum, which has been very important also in May of 2021.
Or is a bottom of the whole cycle in?
In the longer term, I believe that during this year we will break this level downwards. Overall look at the bull market and the bear market that we witnessed in the past few years just shows that this downward movement is simply not significant enough. I, for instance, believe that ETH is right now heavily supported by NFTs.
The logarithmic weekly chart shows that major breakdown should come if we fall below the above-mentioned support. Moreover, this chart clearly shows a head-and-shoulders pattern, which is typically forming at the TOP of a price movement. The level of 1 700 USD is a neckline of this pattern, so breaking below this level might lead to significant selling pressure.
But this support is very strong and I think it might hold for quite some time. I also do not believe that this level will be broken at the first try. But it might happen after all, if enough selling pressure comes and if the macroeconomic conditions are not looking good, which they currently are not.
1W chart of Ethereum, Source: Author’s analysis, tradingview.com
To sum all of this up, I believe that for now, the support will hold but overall, we might see a lower prices for Ethereum this year.