Ethereum Price News: Buyers are Still Out There as $2K Floor Holds During the Weekend

Ethereum (ETH) has gone up by 2% in the past 24 hours after hitting a key psychological support area at $2,000.

Multiples of $1,000 have always been decisive price zones for ETH. In recent history, this has included the $4,000 and $3,000 levels, and could now also add the $2,000 area if we get a strong bounce off this market.

Trading volumes jumped by 30% after hitting this landmark price point, but we could still expect an even stronger pullback as volumes don’t yet reflect that the market hit an order-heavy area.

This week, Ethereum-linked exchange-traded funds (ETFs) booked their 10th consecutive day of negative outflows. Since May 11, investors have withdrawn nearly $500 million from these funds, indicating a temporary shift in sentiment.

Similarly, the Fear and Greed Index is sitting once again in Fear territory at 38. This is also a major change from the 62 reading we got a few weeks ago, which implied that investors were in “Greed” mode.

Traders Position for Further Upside as Open Interest (OI) Keeps Rising

Geopolitical tensions remain high, and the U.S. Federal Reserve just got a new chief. Hence, we can’t blame the market for this kind of volatility, as investors don’t really understand what to make of the latest events.

That said, the passing of the Clarity Act in Congress could boost the price of cryptocurrencies down the road as it would open up the floodgates of the world’s most influential economies to the crypto world.

Money is gonna move to crypto at a pace not seen until now, and that will surely have an impact on valuations.

Despite the latest setback, we have seen a steady increase in bullish positioning in the futures market. Open interest (OI) has recovered from a recent low of around $23 billion to a peak of $34 billion, meaning a 48% jump in just a few months.

Sure, the market is not anywhere near where it was back in October, before Trump flash-crashed the entire crypto space. We are still 50% below those levels, and we may not get anywhere near the $70 billion all-time high in this metric unless ETH rises to $3,000 at least.

Nonetheless, the fact that traders are coming back to the market is a positive sign. And, at a point when the price action seems to be indicating that a cycle bottom is in already, we could witness a strong move in the weeks to come for ETH as long as the $2K threshold holds.

Weekly Buy Signal Sees ETH Rising to $5,400 Over the Next 12 to 24 Months

We have been tracking for months a strong buy signal in Ethereum’s weekly chart that has yielded positive results in the past.

Every time the Relative Strength Index (RSI) in this higher time frame has hit 30 or lower, the token has rallied strongly off those lows. This is a 100% win ratio setup that we just can’t ignore.

It is a major historical pattern and one that we believe should repeat again this time. Crypto’s adoption across the globe is as strong as ever, and the United States is about to jump on board.

In two out of these three last instances, the price has neared the cycle’s bottom, but has never gone below it. That’s reassuring if we believe this pattern will repeat. This signal has delivered gains ranging from 210% to 5,800%.

We don’t believe that this last figure will repeat, as the market has matured and grown to the point that generating those kinds of returns doesn’t seem likely. However, we do see a whole new stage of adoption about to set in with the passing of the Clarity Act and other favorable pieces of legislation.

Even if we get a 200% rally again off ETH’s recent lows of $1,800, that means a target of $5,400 for the next 12 to 24 months. The RSI just moved above the signal line as well, which has been a solid confirmation of the beginning of the three previous rallies.

We could see ETH nearing $1,800 again if this historical pattern repeats, but, statistically speaking, we should not get another cycle low.

Potential 4x Trade in the Daily Chart If ETH Bounces Off $2K

Heading down to the daily chart, we emphasized in our latest Ethereum price prediction that the $2,000 level was the key support to watch during this pullback. That said, we did expect a stronger rally the last time that ETH moved above $2,150.

It appears that market participants are still not confident enough to commit to buying anything outside of Bitcoin. In ETH’s case, the price is still sitting 21% below the 200-day exponential moving average (EMA).

The $2,400 sell wall remains the key resistance to watch in case we get a strong bounce off $2,000. Meanwhile, if the price breaks below it, we could retest the cycle’s low at $1,800, meaning a 10% decline.

If we compared that to a potential 40% increase to $2,800, which has been our target for months, this is a trade with a 4:1 risk-reward ratio.

Meanwhile, for a short-term trade, another retest of the $2,000 level could provide an entry for a 4x trade as well, with a target set at $2,400 and a stop loss placed at around $1,900.

Looking at our signals system, the $2,400 rejection was spotted and confirmed quite accurately. This system tracks specific candle patterns with above-average trading volumes to identify institutional participation in the price move.

We know now that selling pressure at $2,400 is strong. Hence, a bullish breakout above that mark has the power to unleash a major short squeeze that should easily catapult ETH to $3,000. That’s the bullish scenario.

We are not getting any buy signals at $2,000 yet. So, if we do, that would also confirm institutional backing and would further confirm the relevance of this price zone. Stay tuned for updates on these moves