FX.co ★ Technical Analysis of ETH/USD for January 11, 2024

Ethereum Hits New Yearly Highs: An Analysis of ETH/USD for January 11, 2024

Understanding Ethereum's Recent Price Surge

In a surprising twist in the crypto market, Ethereum (ETH) has seen a significant increase in its value, outperforming Bitcoin (BTC) despite the latter's ETF approval by US authorities. Ethereum's price has soared by 8% in just 24 hours, reaching around USD 2,584, marking a 15% rise over the past week. Conversely, Bitcoin's growth has been modest, with only a 0.5% daily and 7% weekly increase, despite positive regulatory developments.

Why is Ethereum Outperforming Bitcoin?

The market is witnessing a unique scenario, possibly a softened version of the "buy rumors, sell facts" phenomenon. Bitcoin's price, despite the ETF approval, hasn't shown the expected surge. This could indicate that the market had already priced in the SEC's approval. Ethereum's rise, on the other hand, might be attributed to the anticipation of future Ethereum-based ETFs, which are likely to follow Bitcoin's lead. The market seems to be pricing in the potential of these future ETH ETFs, even though the SEC's final decision is still months away.

Technical Market Outlook for ETH/USD:

The ETH/USD pair has reached a new yearly high of $2,641. The nearest technical supports are found at $2,444 and $2,431. The current market conditions are extremely overbought on the H4 timeframe, suggesting a potential pullback. However, only a sustained breakout below $2,105 would shift the outlook to bearish.

Intraday 1H Indicator Signals:

• The majority of technical indicators (17 out of 23) are signaling a Buy, with only 3 indicating Sell and 3 remaining Neutral.
• Most moving averages (14 out of 18) also support a Buy signal.

Market Sentiment:

The general sentiment is very bullish (79% bulls vs. 21% bears), with an increase in bullish sentiment over the past week and the last three days.

Weekly Pivot Points:

WR3 - $2,912

WR2 - $2,583

WR1 - $2,406

Weekly Pivot - $2,253

WS1 - $2,077

WS2 - $1,924

WS3 - $1,594

Trading Insights:

The Ethereum market has shown upward movement from a low of $1,520. As long as trades are above the long-term critical support at $1,368, the bullish outlook is sustained. The key mid-term technical support is at $1,913; a sustained break below this level could turn the long-term outlook bearish.

Conclusion and Trading Scenario for Bulls and Bears:

For bullish traders, maintaining levels above $2,105 is crucial to keep the uptrend intact. A continued rise above this level could see Ethereum testing higher resistances, such as $2,641 or even aiming for the WR3 pivot point at $2,912.

Bearish traders, conversely, should look for signs of a breakdown below $2,105. Such a move could lead to a test of mid-term supports at $1,913 and potentially lower levels, marking a shift to a bearish trend.

In summary, while Ethereum shows strong bullish signals, traders must remain vigilant, watching for potential shifts in market sentiment and regulatory news that could impact the cryptocurrency's trajectory.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Notice

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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