In one of our recent crypto market reviews, we described how Ethereum has reached important support levels, which could be the basis for a potential reversal rally for the second largest cryptocurrency in the market.
Support is based on the price performance of ETH prior to June 18 and July 1, when the $1,000 price band was already reached. Fortunately, the buying power of the bulls was enough to drive up the price of the asset on local support, which, if broken, could have pushed Ether directly to new local lows.
In addition to historical price support, Ethereum is also guided by local trendline support, which can be part of the wedge pattern that often occurs in sharp uptrend or downtrend.
The formation of wedges reflects the "cooling" of the market after wild price swings. Traders tend to increase their holdings of assets that move in a wedge because some see it as a reversal pattern.
What could drive up the price of Ethereum?
Unfortunately, for a relatively volatile asset like ETH, a 5% rebound should not be considered a major move, as it would need to gain at least 100% of its current value to recover at least half of the losses it has faced since May.
The only realistic catalysts for the industry right now are expected inflation numbers, relatively quiet gains, and a lack of events that could somehow tarnish the cryptocurrency market and the industry itself.
According to the latest data on institutional net flows, large investors are not yet ready to support digital asset markets and remain cautious while waiting for a fundamental change in sentiment.