Ethereum Price Prediction: ETH Trends Above $1,350 As 4-hour Chart Turns Bearish

Last Updated July 23rd 2021
4 Min Read

Daily Ethereum ETH Technical Analysis
  • Ethereum price is sitting on top of a healthy support at $1,250 (20-day SMA).
  • The 4-hour chart has formed a double-top pattern.

Ethereum price continues to trend in an upward channel formation as it continues to hover above the $1,350 psychological level. Five days back, ETH managed to flip the 20-day SMA from resistance to support. Let’s look at how things stand right now.

 

Ethereum Price On The Verge Of Being Overvalued

ETH managed to reach an all-time high of $1,468 this Monday, January 25. However, it has since retraced and dropped to $1,315, before improving to $1,365, as of writing. However, the relative strength index is on the verge of creeping into the overbought zone, which could trigger a bearish correction.

eth/usd daily chart 012621

Image: ETH/USD daily

IntoTheBlock’s IOMAP tells us that the 20-day SMA ($1,250) is a solid support level that should absorb a lot of selling pressure. Previously, at this level, 221,000 addresses had purchased 6.7 million ETH tokens.

eth/usd volume chart 012621

Image: IntoTheBlock

Looking at the 4-hour chart, we can see a couple of indicators that hint at an upcoming bearish correction. Firstly, the chart has formed a double top pattern with the $1,435 resistance line. It seems pretty evident that the Ethereum price will require a lot of firepower to retake this zone. Secondly, the MACD tells us that the market momentum in this timeframe is on the verge of reversing from bullish to bearish.

eth/usd 4-hour chart 012621

Image: ETH/USD 4-hour

The ETH price in this timeframe is sitting on top of the 20-bar SMA. A break below takes the smart contract leader to the 50-bar SMA and below the $1,200 psychological level.

 

Ethereum Price Is Moving In Line With Team Development Activities

As per Santiment, an on-chain analytics platform, Ethereum’s price movement aligns with its Github activity rate. This shouldn’t be surprising at all since Ethereum’s entire value proposition lies in its programmability.

eth/usd santiment chart 012621

Image: Santiment

 

High Fees Forces Tether Users To Migrate From Ethereum To Tron

High fees on Ethereum appear to be driving people to use TRON for Tether stablecoin transfers. According to CoinMetrics, there have been more Tether transactions (not higher volume) on the TRON blockchain compared to Ethereum every day so far in 2021. This is despite Ethereum housing more than 50% more Tether tokens than the TRON blockchain.

With a circulating supply of around $25 billion, Tether is currently the largest provider of stablecoins. Transaction fees on Ethereum have been surging at an average of over $6 per transaction for most days this year. They went above that level only a dozen times in 2020, according to BitInfoCharts. 

Thanks to the boom in decentralized finance (DeFi), transaction fees on Ethereum started rising above historic levels in May 2020. By contrast, TRON fees amount to fractions of a cent per transaction, on average. 

TRON founder Justin Sun has earlier discussed copying Ethereum to bring more activity to the TRON blockchain. The high fees on Ethereum may incentivize Tether users to jump ship and get some vitality to competitor chains like TRON, as long as such rivals can maintain their low fees.

 

Ethereum Price Is Expected To Reach These Levels

Ethereum bulls will have to overcome the $1,435 double top to continue the upward movement and reach $1,500. On the downside, the Ethereum price may dip till the 20-day SMA ($1,250) if the sellers take control.

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