Negative sentiment is gradually growing in the general crypto market once again, with major digital assets like Ethereum, the second-largest cryptocurrency, witnessing a notable setback that led to a slowdown of its renewed upside price momentum. Due to the sudden drop, several crypto analysts believe that the altcoin could face an extended bearish movement shortly.

Ethereum Set To Enter A Correction Phase

IC News, an informative platform has delved into Ethereum’s current price action, offering an insightful perspective about its performance in the near term. After a thorough examination, the platform highlighted that ETH might be on the brink of a temporary corrective phase as market momentum cools off following recent gains. The platform’s prediction is due to signs of overbought conditions and profit-taking by retail and institutional investors, which could affect the stability of the crypto asset’s value.

According to IC News, Ethereum is currently getting close to a critical resistance area at the $3,600 price level, where there is a lot of supply and room for profit-taking. Given how robust this resistance level is, the platform claims there is a good chance that a brief period of correction could occur soon to limit buying pressure.

Furthermore, IC News points out that in order to create a more stable uptrend for Ethereum, the market will have to fall back toward the 200-day Moving Average (MA). 

While the analysis might spark worries about the altcoin‘s short-term trajectory, the pullback may turn out to be healthy for the asset. This is because the altcoin may create new strong support levels during the correction phase and fortify its base for future price expansion. It could also present several buy signals and opportunities for new and seasoned investors, allowing them to reassess their positions in light of waning market sentiment.

Despite the sudden price decline, the digital asset persistently demonstrates bullish potential in the broader outlook, with market expert and trader, Captain Faibik predicting a mid-term price target for Ethereum at the $5,450 level.

Thus far, Ethereum continues to move within the Broadening Wedge pattern, a key indication of rising momentum. Meanwhile, Captain Faibik anticipates a breakout from the bullish formation in the coming days, which will trigger another huge rally for ETH, potentially to $5,450 in the mid-term.

ETH Now Ahead Of America’s Banking Giant

Ethereum’s recent upswing has led the altcoin to crucial milestones in the last few days, such as surpassing financial behemoth Bank of America by market capitalization. On Sunday, ETH saw a surge in its overall market cap by over 5%, bringing it to a total of $383 billion and breaking past the market cap of Bank of America by a whopping $40 billion.

IC News stated that the crypto asset’s high valuation in comparison to Bank of America reflects a change in the dynamics of the traditional sector as blockchain technology adoption and growth start to outpace traditional banking systems.

Featured image from Unsplash, chart from Tradingview.com

Ethereum has staged an impressive 35% rally since last Tuesday, marking a bullish breakout as it tests crucial supply levels for the first time since late July. Investor sentiment is increasingly optimistic, driven by a surge in Ethereum’s on-chain activity. 

Key data from IntoTheBlock reveals that transaction volume on Ethereum’s mainnet has reached its highest levels since July, a bullish signal highlighting renewed interest and activity in the network. This surge in volume is often seen as confirmation of a breakout, aligning with expectations from investors who have anticipated a strong rally toward Ethereum’s yearly highs. 

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With momentum building, ETH now stands at a pivotal point: if it can maintain strength above these new levels, the stage may be set for further upside as the broader crypto market rallies alongside Bitcoin. 

The next few days will be crucial for Ethereum as traders watch to see if the bullish sentiment can sustain and propel ETH higher into new price territory.

Ethereum Bullish Trend Begins

Ethereum has entered a new bullish phase after eight months of consistent selling pressure and significant accumulation by smart money. Following a long period of subdued price action, ETH is finally rising, signaling a trend reversal many analysts and investors eagerly awaited. 

Data shared by IntoTheBlock on X shows that Ethereum’s mainnet transaction volume has surged significantly, with nearly $60 billion settled over the past week—the highest level since July. This spike in volume is a clear indicator of renewed market interest, and it suggests that more investors are actively trading and accumulating ETH. 

When transaction volumes rise alongside price increases, it often signals healthy demand and strong market confidence, supporting the likelihood of a sustained bullish trend.

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The next few months are expected to be volatile as speculative interest and trading activity heat up, with many traders positioning for substantial gains. Despite the anticipated price swings, analysts agree that Ethereum’s next major target is its yearly high of $4,000. Breaking this level would confirm Ethereum’s bullish momentum and set the stage for potential new all-time highs, aligning with the broader market’s optimism.

ETH Consolidates Above $3,000 

Ethereum is trading at $3,180, following a recent push to a local high of $3,250. After a strong weekend rally, the price paused, hinting at the need for consolidation before another potential breakout. This period of sideways movement could be essential for ETH to establish support and prepare for further upside, as it allows buyers to gather momentum while absorbing any short-term selling pressure.

Key technical levels show that bullish sentiment is likely to strengthen if ETH maintains its position above $2,950, aligned with the 200-day moving average (MA). Holding this critical support level would signal buyers remain in control, setting up ETH for a potential rally toward $3,500 soon. 

However, it’s also possible that ETH could take a few days to build up the momentum needed for its next substantial move as investors assess the recent rally and consider upcoming catalysts.

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In the meantime, the market appears optimistic, with analysts noting that maintaining levels above the 200-day MA is crucial for confirming the long-term bullish trend. ETH’s consolidation phase could be the foundation for continuing its upward trajectory.

Featured image from Dall-E, chart from TradingView