Ethereum price has pulled back in the past few days as the recent rally took a breather. ETH dropped to a low of $1,851, which was 14% lower than the year-to-date high of $2,131. This means that the coin has moved to the correction zone, which happens when an asset drops by 10% from its peak.
Is this the end of the crypto rally?
Ethereum price has declined sharply in the past few days as investors focus on the state of the crypto industry. This decline has been led by Bitcoin, which has dropped from the year-to-date high of $31,000 to about $27,000.
There are several reasons why cryptocurrency prices have pulled back in the past few days. First, the sell-off is mostly because of profit-taking after they crossed key milestones. Bitcoin recently rose above the key milestone of $30,000. Similarly, Ethereum price recently rose above $2,000. In most cases, cryptocurrencies tend to decline after hitting a key level.
Second, Ethereum price is dropping because of the so-called ‘buy the rumour, sell the fact.’ Ethereum jumped recently jumped as investors waited to the Shanghai upgrade. The upgrade means that investors in key platforms like exchanges can now start withdrawing their coins.
Further, ETH price is also plunging because of the uncertainty about the Federal Reserve. In a statement, Fed’s Christopher Waller said the Fed should continue hiking interest rates in the coming months. Analysts now expect that the Fed will continue hiking interest rates in May and then have a prolonged pause.
Ethereum price prediction
On the daily chart, we see that the ETH price has been in a strong bullish trend in the past few months. It has jumped from ~$1,080 to a high of $2,040. The coin has formed a cup and handle pattern, which is a bullish sign. As such, the ongoing decline is part of the handle section.
Most importantly, the coin has remained above the 50-day exponential moving average. The Relative Strength Index (RSI) has moved below the neutral point. Therefore, there is a likelihood that the coin will bounce back in the coming weeks. If this happens, the next key level to watch will be at $2,500, which is about 37% above the current level.
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