Despite the great interest in SHIBA and bitcoin completing its consolidation stage, Ethereum is one of this week's favourites. Altcoin is moving steadily northward and has twice updated its historical high in the last 7 days. All this is accompanied by the start of a long period of deflation of the coin and a shortage of the asset on the market, which is the main driving force of the price growth. Besides, altcoin continues its upward movement within the medium-term trend, hitting a new high. It indicates that the coin will continue to update its highs in the coming days.
ETH hit a new high at $4,600, rising by 3% in the past 24 hours on daily trading volumes of just $22 billion. Besides the lack of coins triggered by the full-fledged London protocols, interest in the coin is stimulated by high activity in the DeFi sector. The total amount of blockchain funds in decentralized projects based on the altcoin blockchain continues to grow, which is reflected in the major assets quotations. Besides, altcoin has attracted institutional attention due to increased deflationary capabilities. Ethereum's new possibilities exacerbated its correlation with BTC, as large companies hedged risk in the two assets. Moreover, buyers have steadily taken positions close to ATH and continue to move the price to the north.
The main reasons for the current rally are evident. However, a significant rise in the ETH futures market is expected in the longer term. According to leading analytical portals in the United States, the regulator plans to approve the ETF for Ethereum futures on CME in the first quarter of 2022 due to which the demand for the futures market of the major altcoin has significantly increased. Investors are optimistic due to the exchange-traded fund's record performance on bitcoin futures. However, at the same time, the experience of launching similar institutions in Canada showed below-average results. Besides, it took more than 8 months to overcome the $1 billion mark in ETH investments. Considering this fact, the results of launching a futures ETF on ether would be a strong positive signal for altcoin. However, they are unlikely to reach BTC performance.
Meanwhile, ethereum is holding steady all-time high and at 1 pm the coin is trading at $4579. After reaching ATH, the cryptocurrency expectedly corrected to the local support zone at $4536, after which it resumed the uptrend. However, the coin encountered increased resistance at the round mark of $4,600, after which sellers began to restore positions. At 1 pm a local support zone at $4576 was formed on the hourly chart, and bears took the initiative in the short term. It is evidenced by the red candle trying to break the support line. In this case, the quotes will move to a short-term downtrend and expand the range of fluctuations. Such a scenario is indicated by technical indicators, which give bearish signals: MACD has formed a bearish crossover and begins to decrease to the zero mark. Stochastic oscillator is also showing weakness in buyers and is beginning to fall to 50. At the same time, the ether has firmly worked the triangle, which is followed by a consolidation phase. On a breakdown of $4536, the stabilization period will be replaced by a short-term downtrend to the nearest support area. With a successful consolidation in this area, the price has all chances to continue its movement to the new ATH.
On the daily chart, after the formation of the volley and two doji candlesticks, the price managed to recover and made a bullish break of the resistance area, which created a strong green candlestick. The current bullish momentum will most likely end with the formation of an uncertain bearish candlestick, which will be followed by the consolidation period with a possible rebound to the local support zone at $4249. At the same time, technical indicators are confidently moving north, indicating a strong position of buyers. Therefore, the stabilization phase may end in the next few hours, after which a breakthrough ATH and the movement to a new high will take place.
The 4-hour chart is excellent for determining the time boundaries of the consolidation period. Considering this fact, a downward price movement will start in the near future due to the formation of two red candles in a row, indicating strengthening of the sellers' positions. The price will unlikely fall below $4466 as the sellers' positions are strong in the short term, therefore a rebound from this local support zone is highly probable. If a bearish break occurs, buyers will have to defend the boundary of $4422. Besides, a wedge will be formed at the 4-hour chart, and its analysis may lead the price to the area above $4,600. In the nearest future the ETH quotes will continue to decrease. However, it is unlikely to expect a confident breakdown of two local support zones in the range of $4,400-4,600. After 3 pm the price will form a clear movement vector, which will most likely be the way to hit a new historical high.
