The cryptocurrency trader and analyst Ali revealed in an X post yesterday that there is currently a large supply wall hindering the chances of an Ethereum (ETH) breakout. According to the post, there is a supply wall of around 33 million ETH at $1,960.
Wen #Ethereum break out?
Well, you may need to wait for $ETH to overcome the huge supply wall at $1,960. Here, 1.14 million addresses bought nearly 33 million #ETH, according to @intotheblock. pic.twitter.com/B2noPQbJPc
— Ali (@ali_charts) October 26, 2023
The leading altcoin suffered slightly over the past 24 hours of trading. According to data from the cryptocurrency market tracking website CoinMarketCap, ETH recorded a 3.15% loss throughout the past day of trading. This brought the cryptocurrency’s price down to $1,788.47. Notably, the decrease in price was not enough to flip ETH’s weekly performance, as it still stood over 12.62%.
Daily chart for ETH/USDT (Source: TradingView)
From a technical perspective, ETH has been in a consolidation phase between $1,755 and $1,860 over the past few days. However, technical indicators on the altcoin’s daily chart suggested that it may break below this channel in the next 24-48 hours.
Firstly, the daily RSI line was sloped negatively towards oversold territory and was also closing in on the daily RSI SMA line. This suggested that buyers were losing strength, which may lead to sellers gaining the upper hand on the altcoin’s chart soon. A confirmation of this will be when the daily RSI line crosses below the RSI SMA line.
Adding support to the bearish thesis is the daily MACD indicator. Although the MACD line was breaking away positively from the MACD Signal line, the gradient of the MACD Histogram has flipped negative. This could be an early sign that ETH’s current trend may undergo a bearish reversal in the short term.
Should these bearish technical flags be validated, ETH could drop to as low as $1,645 in the next few days. On the other hand, ETH maintaining a position above $1,755 in the coming 48 hours could invalidate this bearish thesis. In this bullish scenario, ETH could rise to as high as $2,035.
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