Ethereum Price Hits $1,700 for the First Time in Five Months
• Ethereum (ETH) surged past the $1,700 level on February 2nd, for the first time in five months since September 12th.
• ETH is facing resistance at $1,680 and currently forming an ascending triangle pattern.
• Profit-taking has jumped to a two-year high recently and ETH could reach $1,800 or higher this month if it breaks past the pattern deadline by mid-February.
Bullish Triangle Pattern
Ethereum (ETH) is currently forming an ascending triangle pattern as it attempts to surge past its resistance at $1,680. If successful, investors are expecting the price to reach $1,800 or even higher this month in February. However, it will depend on how ETH behaves as it reaches the pattern deadline by mid-February.
Negative Newsflow & High Profit Taking
The world’s second-largest cryptocurrency Ethereum (ETH) has gained by a strong 40 percent over the last month of Jan in line with BTC gains. But still, traders are not expecting any immediate positive price action here due to negative newsflow and high profit taking which have both reached their highest levels in two years since February 2021.
Futures Premiums & Bearish Indicators
Looking at the Ethereum (ETH) derivatives market, futures premiums should trade anywhere between 4 percent and 8 percent in healthy markets to cover costs and risks associated with trading them. Whenever futures trade at a discount to spot market prices, it shows a lack of confidence from leveraged buyers hinting at a bearish sentiment. Currently futures premiums are trading below that 4 percent threshold showing some bearish indicators for ETH despite its recent rally around $1,700 mark.
Retail Investors Should be Cautious
Retail investors should be cautious here as repeated failures to break past $1,680 levels coupled with negative newsflow could give bears the upper hand to cancel out bullish triangle patterns which would mean that Ethereum may not reach its expected highs of around $1,800 this month after all.