The world’s second-largest cryptocurrency Ethereum (ETH) has been participating in the broader market rally gaining more than 40% over the last month. On Wednesday, February 1, the ETH price jumped by another 7% and is currently trading at $1675 with a market cap of $204 billion.
The recent price rally in ETH comes amid the broader market’s reaction to the FOMC meeting on Wednesday. As the interest rate hike of 25 basis points was on the expected line, the crypto market cheered.
However, after a strong rally since the beginning of 2023, ETH investors and holders need to maintain caution going ahead. On-chain data shows that the profit-taking in ETH is intensifying and the altcoin might be gearing to shed some of its gains in February.
On-chain data provider Santiment reported that a look at ETH’s Aroon indicator, on the daily chart, shows that bullish sentiment has weakened significantly over the past few weeks. The Aroon upline was at 21.43%.
Usually, when the Aroon Up line approaches zero, it suggests a weak uptrend and a distant high. This basically hints at the possibility of a trend reversal.
Ethereum (ETH) Price Swings
Coingape reported that the ETH price has been stuck between $1682 and $1506 over the past two weeks. Currently, it’s quite close to the upside resistance, and any breakout above it could set Ethereum up for a further rally. In bullish conditions, the ETH price could rally 40% from here, i.e., up to $2,400.
However, the Aroon indicator is hinting at trend reversal and there’s every possibility that the ETH price could be heading lower from here. Thus, any closing under $1,500 could weaken the bullish case theory indicating further price correction to $1,350.
Many experts believe that the year of 2023 could be the year of recovery for crypto. It will be interesting to see whether ETH can keep up the momentum, or a partial pullback is on the cards.
