A Visit to This Key Level Could Send Ethereum on a Violent Rally to $370
Ethereum has been one of the best performing cryptocurrencies throughout 2020, with the cryptocurrency’s January uptrend turning parabolic this February after ETH broke above $200.
This parabolic rally led the crypto as high as $290, which is around where its buyers lost their strength, subsequently leading the crypto to reel back down to $260.
In the near-term, one prominent analyst is noting that the crypto could see some further short-term downside, but it is important to note that a visit to its previous swing highs could catalyze a massive rally that leads ETH up to fresh yearly highs of $370.
Ethereum Incurs Short-Term Downtrend as Analysts Eye Further Losses
At the time of writing, Ethereum is trading down 6% at its current price of $259, which marks a notable decline from its daily highs of $277 that were set yesterday morning prior to Bitcoin’s sharp movement to below $10,000 that led altcoins like ETH to similarly drop.
While zooming out and looking at ETH’s price action over the past several days, it is clear that the crypto’s intense uptrend appears to be stalling, as it has declined significantly from highs of $290 that were set on Friday.
In the near-term, analysts believe it will continue seeing further downside until it reaches its prior swing high at $224.
Nik Patel, a prominent trader and analyst, spoke about this in a recent blog post, in which he explains that ETH is likely to continue declining until it reaches this aforementioned prior swing high.
“Beginning with ETH/USD on the Weekly timeframe, we can see that, with price having closed above the prior swing-high at $224 last week, the rally continued this past week with volume continuing to rise. If we do get a Bitcoin-led dip next week, a retest of $224 would be a perfect opportunity in my opinion,” he noted.
Will a Visit to $224 Allow ETH to Rally to Over $370?
Although a drop to these levels would likely lead many investors to flip bearish on Ethereum, it is important to note that Patel believes it could be closely followed by an intense rally up to $370.
“The highs above at $370 remain the primary target, as I expect this area will be retested over the coming months,” he explained.
If Ethereum does correct to $224, it will mean that it has erased nearly all of the gains it has incurred over the past two weeks, and it will be critical that ETH holds above this key support in order for it to rally past $300.
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