Here are the reasons February could be rough for Ethereum (ETH) holders
The second-largest cryptocurrency in the world, Ethereum (ETH), has been taking part in the wider market rally, gaining more than 40% in the last month. The ETH price jumped another 7% on Wednesday, February 1 and is currently trading at $1675 (a market cap of $204 billion).
The recent price rise in ETH is due to the wider market’s reaction on Wednesday’s FOMC meeting. The crypto market cheered the 25 basis point increase in interest rates.
ETH holders and investors need to be cautious after a strong rally from the beginning of 2023. On-chain data suggests that profit-taking in ETH has intensified and that altcoin might be preparing to lose some of its gains in February.
Santiment, an on-chain data provider, reported that ETH’s Aroon indicator (on the daily chart) shows that bullish sentiment has declined significantly over the past weeks. The Aroon upline was 21.43%.
Usually, the Aroon Up line is close to zero. This indicates a weak uptrend, and a distant peak. This indicates a possible trend reversal.
Courtesy of SantimentEthereum, (ETH) Price Swings
Coingape reported that the ETH market price has remained between $1682 to $1506 for the past two weeks. It’s currently close to the upside resistance. Any breakout above it could lead to Ethereum launching a further rally. Bullish conditions could see ETH rally 40%, i.e. to $2,400.
The trend reversal signal from the Aroon indicator suggests that the ETH price may be heading lower. Any closing below $1,500 could signal a weakening of the bullish case theory, indicating further price corrections to $1,350.
Experts believe that 2023 could be the year for crypto’s recovery. It will be interesting for ETH to see if it can maintain the momentum or if there is a partial pullback.
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