Ethereum price has bounced back after the sharp weekend sell-off. The ETH token is trading at $4,360, which is about 26% above the lowest level during the weekend. It is just a few points below its all-time high of more than $4,800.
Ethereum and other cryptocurrencies declined sharply during the weekend. Analysts blamed the sell-off on several factors. First, the decline happened after the tech-heavy Nasdaq 100 index declined by more than 300 points on Friday.
This drop was because the Federal Reserve chairman hinted that the bank will accelerate its tightening policies in next week’s meeting. Historically, Ethereum tends to underperform when the Fed has embraced a hawkish tone.
Second, the decline happened as investors took profits considering that Ethereum has jumped sharply this year. Third, there have been concerns about the bullish trend will continue since the price has been a bit volatile in the past few weeks. It has struggled to retest its all-time high.
Still, Ethereum has rebounded as part of the overall cryptocurrency and Nasdaq 100 index rally. Investors have also bought the dip as they price in a Santa rally.
On the daily chart, we see that the ETH price has rebounded sharply in the past few days. It has already jumped by more than 26% from its lowest level on Saturday. As a result, it has moved above the ascending trendline that is shown in black. It has also risen above the important level a $4029, which is shown in red. This price was the highest point on September 3.
Therefore, I suspect that this is the start of the Santa Rally, which could push the coin to above $5,000. The price is about 15% above the current level. This view will be invalidated if it moves below the weekend low at $3,500.
This post was last modified on Dec 07, 2021, 05:34 GMT 05:34