Ether may go for a short-term correction.
The second currency of the crypto world continues to attract the attention of investors. The profit of the Coinbase crypto exchange for the second quarter showed that the volume of ether trading increased to 26% of the total volume of the cryptocurrency, exceeding the volume of bitcoin trading, which, on the contrary, fell to 24%. According to Coinbase, the increased interest in decentralized finance (DeFi) and non-interchangeable tokens (NFT) has stimulated the growth of ether trading. Our traditional analysis of ETH/USD will show how the growth of popularity will affect the cryptocurrency exchange rate.
The price of ether last week increased by 9.89% and by the end of last week amounted to $3311.65. After the recent rise, the ETH/USD rate reached the 61.8 percent Fibonacci retracement level at $3,356. 83, which is likely to become a tough resistance. If the price pushes off from the upper resistance, the "bears" will try to pull the pair to the 20-week exponential moving average (EMA), according to the technical analysis of ETH/USD.
Both moving averages have an upward slope, and the relative strength index (RSI) is in a positive zone, which indicates the advantage of buyers. Any drop is likely to find strong support at the $3000 level and the 20-week EMA.
On the other hand, a breakout and a close above the $3356.83 mark will open the doors for a possible rise to the 78.6 percent Fibonacci retracement level at $3806.71. The first sign of weakness will be a breakout and a close below the 20-week EMA. Such a move will indicate a weakening of the bullish momentum.
The price of ether on August 7 overcame the level of $3000, but the "bulls" could not benefit from the growth and start a new uptrend. This suggests that the "bears" are trying to stop the growth.
Sellers will have to lower the price below the 20-day EMA to signal a weakening of the bullish momentum. If they succeed, a few aggressive "bulls" who bought a break above $3000 may fall into the trap.
This can lead to the closing of a long position and a decrease in the price to the 50-day simple moving average (SMA).
Conversely, if the ETH/USD rate bounces from $3000 and rises above $3450, the bullish momentum may strengthen, clearing the way for growth to $4000 and $4200.
What will be the ETH/USD exchange rate at this week
Ether has been above $3000 over the past few days, which will indicate an advantage for buyers. If the bulls raise the price above $3,450, the upward momentum may strengthen.
On the other hand, if the "bears" pull the price below the support of $3000, the ETH/USD rate may fall to the 50-day moving average.