Current dynamics

The ETH/USD pair continues to grow actively for the second month in a row: the day before, quotes reached seven-month highs, testing the 3750.00 mark (Murray level [8/8]), but the price failed to break through higher, and is currently correcting downwards.

Experts attribute the current dynamics to the transfer of 19.8 thousand BTC coins worth approximately $1.9 billion to the Coinbase Prime wallet by the US government. Recall that these tokens were previously confiscated by law enforcement agencies as part of an investigation into the illegal activities of the Silk Road cryptocurrency platform. Now market participants fear that officials will start selling these assets, although there is no exact data on the purpose of the transfer. Members of the crypto community, including Coinbase platform director Brian Armstrong, consider possible such sales a mistake, especially in light of the plans of the administration of newly elected President Donald Trump to bring "digital gold" to the status of a state reserve.

However, the potential for the current price pullback seems limited, as the overall fundamental factors remain positive for the crypto market: investors are still interested in the assets, hoping for further growth in quotes after the change in the leadership of the US Securities and Exchange Commission (SEC) and the arrival of a more favorable government to the sector. As a result, the volume of the decentralized finance (DeFi) market and investments in exchange-traded funds is growing: last Friday, it was a record $ 332.9 million for the Ethereum ETF and even exceeded the same daily figure for the Bitcoin ETF, which was at $ 320.0 million. Observers also note that the inflow of funds into spot ETH-based exchange-traded funds has been continuous for more than a week, while instruments based on the first cryptocurrency had sessions with capital outflows during this period.

Thus, current market conditions contribute to further growth of ETH/USD pair quotes.

Support and resistance levels

The price remains close to the 3750.00 mark (Murray level [8/8]), consolidation above which will ensure continuation of the upward dynamics to the target of 4062.50 (Murray level [ 2/8]). The key support zone for the “bears” seems to be 3437.50–3370.00 (Murray level [6/8], the middle line of Bollinger Bands), a breakdown of which downwards will lead to a decline to the levels of 3125.00 (Murray level [4/8]) and 2968.75 (Murray level [3/8]).

The current trend continues, which is confirmed by the upward reversal of the Bollinger bands and the increase in the MACD in the positive zone, while the downward movement of the Stochastic from the overbought zone does not exclude a corrective decline, but its potential seems limited.

Resistance levels: 3750.00, 4062.50.

Support levels: 3370.00, 3125.00, 2968.75.

Trading scenarios

Long positions can be opened above the 3750.00 mark with a target of 4062.50 and a stop loss of 3500.00. Implementation period: 5-7 days.

Short positions can be opened below the 3370.00 mark with targets at 3125.00, 2968.75 and stop loss at 3530.00.