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Ethereum's recent bullish flag pattern signals a potential price rally, suggesting investors should prepare for possible gains. ETH's price consolidation and increased buying pressure highlight this optimistic trend.
Ethereum's Bullish Flag Pattern Indicates Potential Rebound to March Highs Despite Recent Decline
In a recent report by AMBCrypto, Ethereum [ETH] experienced a bullish close to May, as evidenced by the token's daily chart, which displayed a substantial green candlestick. However, investors were not interested in the token last week, which experienced a significant decline.
Nevertheless, the imminent reversal of the downward price trend may enable ETH to revisit its March highs.
CoinMarketCap's data indicate that Ethereum's price has declined over 7% over the past seven days. At the time of writing, ETH was trading at $3,516.89 and had a market capitalization of over $422 billion.
A favorable pattern has emerged on the daily chart of the token, which should not discourage investors. AMBCrypto discovered that the price of ETH has been consolidated within a bullish flag pattern.
After reaching its peak in May, the token entered the pattern. At the time of publication, the token's price was challenging support near the lower limit of the bullish flag pattern.
A practical test could initiate a bull rally. If this occurs, it would be unexpected for Ethereum to revisit its March highs of $4k in the upcoming weeks.
ETH Poised for Potential Gains as Bullish Indicators Strengthen Amid Decreasing Exchange Reserves
ETH must record a few green candlesticks in the upcoming days to evaluate the bullish flag pattern. AMBCrypto analyzed CryptoQuant's data to determine whether this was feasible.
Based on our analysis, the exchange reserve of ETH was decreasing, indicating a significant amount of purchasing pressure on the token. Furthermore, the number of coins transmitted has increased by 13.93% in the past 24 hours, which can be interpreted as a bullish signal.
The derivatives market also appeared optimistic as ETH's funding rate increased. This implies that long-position traders are in a dominant position and are willing to compensate short-position traders.
AMBCrypto's analysis of Glassnode's data indicated that ETH's NVT ratio decreased last week. When the metric decreases, an asset is undervalued, which typically leads to an increase in price.
The price of Ethereum reached the lower limit of the Bollinger Bands, suggesting that there may be a rebound. Additionally, its Relative Strength Index (RSI) experienced an increase and was on the verge of reaching the neutral level.
However, the MACD demonstrated an adverse advantage in the market, potentially impeding ETH's recovery.
AMBCrypto subsequently examined the liquidation heatmap of ETH to identify potential support and resistance levels. We discovered that investors may see ETH reach $3,675 soon if ETH experiences a favorable trend.
Nevertheless, if ETH fails to test the bullish flag pattern, the token may decline to $3,500 immediately.
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