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In one of our recent cryptocurrency market reviews, we described how Ethereum is reaching an important support level that might become a foundation for a potential upcoming reversal rally on the second biggest cryptocurrency on the market.
The support was based on the previous price performance of Ether that had already reached the $1,000 price range on June 18 and July 1. Luckily, the buying power of bulls was enough to elevate the price of the asset with the local support which, if broken, could have launched Ether directly to new local lows.
In addition to the historic price support, Ethereum is guided by the local trendline support, which could be part of the wedge formation that quite often appears during sharp up- or downtrends.
The wedge formation is a reflection of the market's "cooldown" after a volatile and strong price move. Traders are usually accumulating assets that are moving in the wedge formation as some treat it as a reversal pattern.
What might push the price of Ethereum up?
Unfortunately, the 5% bounce should not be considered a major move for a relatively volatile asset like ETH as it needs to gain at least 100% of its current value to recover at least half of the losses it faced since May.
The only realistic catalyst in the industry right now is the expected inflation data, a relatively calm rate hike and a lack of events that could somehow discredit the cryptocurrency market and the industry itself.
According to the most recent data on institutional net flows, large investors are not yet ready to support the digital asset market and remain cautious while waiting for a fundamental change in market sentiment.