Ethereum (ETH) has experienced a monumental surge this week, gaining over $1,000 in just seven days and surpassing a price level it has not reached in six months.
While momentum remains strong, analysts are urging caution, as signs of a short-term correction are emerging.
Ethereum Enters Overbought Territory After Pump to $3,600
Ethereum’s rally began after breaking out of a prolonged consolidation phase between $2,400 and $2,800. After several weeks within this range, bulls ultimately prevailed and breached the supply zone around $2,800. This triggered aggressive buying, propelling Ethereum’s price to levels last seen in January.
The daily chart shows an explosive breakout with little resistance until the $3,600 level, where ETH is currently trading. Notably, the price reached $3,674 before cooling off.
Meanwhile, at this position, the Relative Strength Index (RSI) has entered overbought territory, indicating that the asset may be temporarily overextended. The price action has also formed a steep vertical climb, leaving previous liquidity zones behind.
Analyst Michaël van de Poppe highlighted this development in a tweet commenting on the rapid rise.
Pullback Is Coming
The chart accompanying his analysis suggests that while downside liquidity has been cleared, there is now “liquidity on the long side ready to be taken.”
This implies that traders may look to trap late long entries before initiating a pullback. Specifically, van de Poppe’s chart points to a potential correction of around 11.7% from current levels, which could bring ETH back to the $3,170 area.
This is likely a demand zone where buyers may re-enter before another leg higher.
Van de Poppe: “Corrections Are Healthy”
Van de Poppe emphasized that corrections are not a sign of weakness but a necessary phase to rebuild momentum. He also noted that Fridays and Saturdays are typically correction days in crypto markets.
In parallel, he urged market participants to use such dips to position themselves for the next uptrend. Essentially, the projected dip, should it occur, could present a strategic accumulation opportunity.
Meanwhile, at press time, Ethereum is still holding around the $3,600 level. Ongoing accumulation by whales and ETFs is further supporting price action. For context, Ethereum ETFs purchased $1.3 billion worth of ETH in the past two days.
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.
