Due to the fact that the crypto market is in a loop-the-loop, Ethereum (ETH) has been consolidating its position and could not break through at most $4000. Thereby, the optimistic forecast for next year has been followed closely by ETH investors who are optimistically watching the once $4,000 accounted for digital asset. Yet, a complete price analysis brings to light several obstacles, hampering Ethereum’s strong uptrend.
Pi Cycle Top Indicator Analysis
The Pi Cycle Top Indicator, a renowned metric among crypto analysts, offers insights into market cycles and potential price peaks. Based on this indicator, ETH’s price action hints at an imminent consolidation phase.
Notably, the gap between the 111-day moving average and the 350-day moving average multiplied by two suggests a stabilization period rather than market exuberance. Per Glassnode data, the Pi Cycle Top Indicator’s upper boundary looms near $4,231, while the lower boundary rests at approximately $2,750.
The indicator’s principle suggests that a market top could be imminent when the price surpasses the longer-term average (350-day multiplied by 2). Conversely, it could signal undervaluation when it dips below the short-term average.
For Ethereum, the lack of convergence between these averages and parallel trajectory lines sans a crossover event suggests that the groundwork for a robust, long-term support level is being laid. This narrative aligns with the notion of Ethereum entering a consolidation phase, paving the way for future ascents.
NUPL Indicates Market Indecision
One more significant metric that reveals Ethereum’s price behavior, however, is measured by the NUPL or Unrealised net profit/loss. This performance indicator is analogous to investor sentiment which is used here to measure the differences between realized profits and losses.
To note, however, the ETH’s NUPL has been more of a “Optimism — Anxiety” than “Belief — Denial” when the market unsure about what’s the next move.
Glassnode’s data showed that investors oscillate between cautious optimism and a tempered conviction in the asset’s potential.
This trend indicates a potential consolidation phase, wherein Ethereum seeks to establish stability amidst fluctuating market sentiments. Furthermore, the absence of strong greed or fear suggests a gradual price ascent rather than volatile swings.
EMA Lines Confirms Consolidation Phase
A closer examination of Ether’s price action through Exponential Moving Average (EMA) lines reveals further insights. These lines, which give more weight to recent price movements, converge closely, indicating minimal volatility and a consolidation phase.
Traders and analysts closely monitoring Ethereum’s 4-hour price chart note the equilibrium between buyers and sellers, with ETH hovering around clustered EMA lines. While this signifies a lack of a strong trend, it also implies a period of range-bound trading. A decisive break above these tangled EMA lines could propel Ethereum toward the $4,100 level, setting the stage for a strong bullish rally.
ETH’s Potential Price Scenarios
Based on these wholistic analyses, Ethereum’s journey towards $4,000 has several potential scenarios. In the event of a bullish breakout, where Ethereum decisively breaches the clustered EMA lines, investors could witness a surge toward the $4,100 resistance level.
However, should the consolidation phase turn bearish, ETH would find support around the $3,200 level. Nevertheless, one factor that could influence Ethereum’s price trajectory is the approval of a spot Ethereum Exchange-Traded Fund (ETF).
If approved, an ETH ETF could inject fresh capital into the market and catalyze upward price movement. However, analysts now doubt that the approval will happen anytime soon as they believe the SEC is not moving fast enough compared to its actions before the spot BTC ETF approvals.
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