Traders and investors who experience the cryptocurrency market for the first time may be shocked and elated by how dramatic the upward spikes can be. During typical expansion phases, it’s common to see many altcoins move up 5x their starting value. Similarly, Ethereum (ETH-USD) and the broader cryptocurrency market can see a greater than -50% drawdown in a bull run.
Ethereum is the second largest cryptocurrency by market capitalization and a decentralized platform that enables the creation and execution of smart contracts and decentralized applications (dapps). Ethereum has expanded beyond a medium of exchange to become a robust platform for decentralized innovation, allowing developers to leverage its technology for various applications, from finance to gaming.
A History of Deep Retracements
Ethereum has a history of deep retracements. Let’s take a look at how common and dramatic some of Ethereum’s pullbacks during a bull market have been in the past:
As we can see, the pullbacks are certainly extreme. For those new to the cryptocurrency market, they may be terrifying. However, some analysts believe that since 2017, the extremes of retracements market-wide have been reduced.
Ethereum’s performance in 2024 has been exceptional, with a nearly +80% gain YTD. However, the most important network upgrade to ETH since the Merge, the Dencun upgrade (released two days ago), failed to generate any immediate bullish momentum.
Ethereum Technical Analysis
TipRanks’ Technical Analysis tools send a clear message to Ethereum traders and investors. The Moving Averages Convergence Divergence (MACD) indicator stands at 284.72, suggesting a Buy signal for Ethereum—it points towards potential upward momentum in the price of Ethereum.
In addition, the 20-day exponential moving average (EMA) is recorded at 3618.56, with Ethereum’s current price at $3,692.14, indicating a buy signal. This suggests that Ethereum’s price is positioned above its short-term moving average, a positive sign for bullish momentum.
Similarly, the 50-day EMA, at 3163.70, with Ethereum’s current price also indicating a buy, underscores a bullish trend over a more extended period. The price exceeding the 50-day EMA suggests sustained positive momentum.
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