Ethereum has been able to climb all the back up to its local highs of $190 as its upwards momentum continues to build. This movement has come about after Bitcoin was able to gain a solid foothold above $7,500.
Today’s upswing has marked an extension of the rally that Ethereum has been caught within in the time following its decline to the sub-$100 region in mid-March.
Analysts are growing concerned about the strength of its recent uptrend, however, as it has failed to retest its previous resistance levels as support – meaning that it may be positioned to revisit these levels in the near-term.
Ethereum Reaches Local Highs as It Approaches a Major Supply Zone
At the time of writing, Ethereum is trading up just under 1% at its current price of $189.40, marking a notable climb from its daily lows of $184 that were set during a fleeting dip late yesterday.
The cryptocurrency is now engaged in a bout of consolidation just below its current resistance at $190. This level happens to be where it rallied to last Saturday before facing a firm rejection here.
One popular pseudonymous Ethereum-focused analyst on Twitter recently offered a chart showing that the crypto’s major supply zone exists just below $200 – meaning that this could be the level it rallies to before facing a potentially grueling selloff.
“Tiredness developing on ETH approaching the major supply. Timing will be important but the underlying issue is beginning to show itself,” he explained, pointing to the chart seen below.
If Ethereum is unable to garner enough buying pressure to surmount this level, it could be a dire sign that uncovers some underlying weakness amongst its buyers.
ETH’s Failure to Confirm Previous Resistance Levels as Support is a Grim Sign
In addition to facing a heavy overhead supply zone that could hamper its price action, the cryptocurrency has also failed to confirm its previous resistance levels as support throughout the course of its recent uptrend.
This has led another popular crypto trader to note that it does seem likely that its previously intense resistance levels will be retested in the near-term.
“Incredibly strong recovery here, nearly 30% from the local bottom. – However, genuinely concerned about those resistance levels that were never tested as support – rules are rules, gaps eventually always get closed,” he said.
Unless Bitcoin continues pushing higher and allows Ethereum to shatter its overhead supply zone, it is possible that this will be enough to spark the decline that lead ETH to retest these previous resistance levels in the days and weeks ahead.
Featured image from Unsplash.