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HomeCrypto NewsAnalysisEthereum Battles at $3,200: Can Buyers Drive it to $4,361?

Ethereum Battles at $3,200: Can Buyers Drive it to $4,361?

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As the crypto market recovers, Ethereum aims for a breakout rally to cross the $4,000 psychological resistance and kickstart a fresh bull run.

As Bitcoin pushes above the $105,000 resistance, Ethereum is gradually making a comeback. Over the past 24 hours, Ethereum’s price has increased by 1.89%, nearing the crucial $3,200 psychological resistance.

With a market cap of $385 billion, the largest altcoin is on the verge of a breakout rally. Will the broader market’s short-term recovery fuel this ETH price breakout? Let’s find out.

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Ethereum ETFs Flow Stay Red Despite Steady Fed Rates

While U.S. spot Bitcoin ETFs recorded $92 million in inflows, institutional support for Ethereum is struggling to resurface. On January 29, despite the FOMC’s decision to keep federal rates steady, U.S. Ethereum ETFs saw an outflow of $4.82 million.

Grayscale’s mini Ethereum trust and Bitwise both recorded net outflows. Grayscale’s ETHE sold $15.57 million worth of Ethereum, while Bitwise offloaded $4.05 million.

On the other hand, BlackRock and Fidelity bought $9.49 million and $4.49 million worth of Ethereum, respectively. Other Ethereum ETFs reported no significant changes in flow.

Ethereum ETFs
Ethereum ETFs

ETH Price Analysis Suggests Breakout Chances 

Ethereum’s price action on the 4-hour price chart shows a persistent struggle to gain bullish momentum. Recently, Ethereum’s price dropped to $3,000 for the fourth time in the past 30 days.

However, following a double-bottom reversal and a broader market recovery, Ethereum presents significant upside potential.

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With a 2.80% bullish engulfing candle, Ethereum is currently trading at $3,200, forming a Doji candle on the 4-hour chart.

COINBASE:ETHUSD Chart Image by Trojan69420

Ethereum Technical Insights and Price Targets

As Ethereum faces crucial psychological resistance, technical indicators signal a potential buying opportunity. The short-term reversal, coupled with the bullish engulfing candle, has pushed Ethereum past the midline of the Bollinger Bands.

With the upper Bollinger Band declining, the short-term reversal points to a potential breakout. Additionally, the True Strength Index (TSI) has shown a positive crossover, supporting the chances of a bullish rally.

The Fibonacci retracement levels highlight a key resistance at $3,271, aligned with the 23.60% Fibonacci level. Therefore, along with the local resistance trendline, Ethereum faces multiple resistance levels.

However, with the broader market recovery, Ethereum could follow a trajectory similar to its 2021 bull run. A breakout above the resistance trendline could propel Ethereum to the $4,071 resistance.

Furthermore, Fibonacci levels suggest upcoming price targets at $4,361 and $4,725. On the downside, the $3,000 psychological mark remains resilient and will likely absorb potential surprise supply waves.

Downside Risk Spikes to 40% as MVRV Declines 

Despite the broader market recovery, on-chain data for Ethereum signals a potential correction ahead. In a recent post on X, Ali Martinez pointed out that Ethereum’s MVRV data suggests a possible downside of 40%.

Ethereum’s MVRV has recently dipped below its 160-day moving average. The last time this occurred, Ethereum saw a 40% correction from $3,500 to $2,100.

However, with market conditions shifting, a rebound is possible if institutional support resurfaces and the broader market continues to recover.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

Author

Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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