The cryptocurrency market was in the process of consolidation, which lasted more than a month. During this period, the level of volatility of the main digital assets decreased to local lows. This provoked the price movement in a narrow range with the gradual formation of "triangles."
Between October 25 and 26, the cryptocurrency market experienced a significant surge in volatility and trading volumes. Thanks to this, the market capitalization has increased to $1 trillion. The volume of liquidated short positions reached $1.3 billion.
Thanks to the successful bullish movement, Ethereum managed to reach the $1,550 level. The total growth of altcoin over the past seven days was 20.3%. The cryptocurrency has successfully broken through the level of the downward trend line and continues to move towards $1,650.
Prerequisites for growth
Considering the current macroeconomic situation, the reasons for the rise of Bitcoin and Ethereum are similar. The peak bullish period in the stock market this season, as well as the correction of the US dollar index, provoked a bullish breakout and liquidation of the bears' positions.
Santiment analysts also report that one of the key reasons for the growth of ETH/USD quotes was the activation of the "whale" wallet, which has been inactive for 6 years. The address transferred 15,000 ETH to an empty wallet, which subsequently caused the price of ETH to rise by 8%.
ETH/USD technical analysis
Ethereum, like Bitcoin, was in the consolidation stage for about a month and significantly reduced the level of trading activity and volatility. The main obstacle for the growth of the altcoin was the level of $1,440, where the downward trend line passed.
After a long period of accumulation, Ethereum made a bullish breakout of the downward trend line. The cryptocurrency reached a strong resistance zone of $1,580–$1,680, where there was a long trade and large amounts of liquidity were concentrated.
If this level is successfully broken, the price of ETH will move to the level of $1,780, which is the second local high since May 2022. Maintaining the bullish dynamics will allow the cryptocurrency to continue moving to the local high of the last 6 months at $2,027.
On-chain analysis of ETH/USD
The surge in trading activity and the growth of ETH quotes provoked a similar reaction of on-chain indicators. The number of active unique addresses has reached 450,000 and continues to grow. The growing trading volumes confirm investors' activation.
There has also been an increase in open interest in ETH in the derivatives market. This indicates the continuation of the upward trend in the overall level of liquidity and investor attention to the altcoin. The growing open interest in Ethereum indicates an attempt to form a local upward trend.
Results
Ethereum is facing increased selling pressure near the $1,560 level. As a result, technical metrics are turning sideways. This means that the initial strength of the bullish momentum has been exhausted and in the near future, the main target for ETH will be to consolidate above $1,500.
On-chain indicators and the MACD indicator indicate an attempt to form an upward trend, which is supported by the market. Given this, we can expect further movement in the price of ETH to local highs at $1,780 and $2,027.
However, the fundamental situation has remained the same. The growth of the cryptocurrency market was due to a combination of factors: the local bullish trend of the stock market and the DXY correction. Given these facts, you should not count on the formation of a long-term bullish trend.
