Ethereum analyst warns of ‘clean fakeout’ despite 30% ETH price rebound

After falling to $880 on June 18, Ethereum’s native token Ether (ETH) experienced a dramatic relief rally. This was its lowest level in 18 months.

ETH price regains 30% in two days

Ether’s price soared to above $1,150 on June 19, marking a 30% gain in just two days. The ETH/USD pair fell almost 9% to $1,150 at the start of the weekly session on June 20.

PostyXBT is an independent market analyst who advised his 79,800 followers not to panic about the recent ETH price rise. He noted that it would be “a clean fakeout.” Here are excerpts of his statement.

“It seems like a good opportunity to flip long toward $1,250, but $BTC hasn’t reclaimed its like-for-like level.”

4-hour chart of the ETH/USD price. Source: PostyXBT/TradingView

Next ETH price target: $700-$800

These statements are Ether (BTC), Solana(SOL), Cardano (ADA) and other top cryptocurrencies have entered a bearish market.

The ETH/USD trades now 77% lower than its record high of $4,951 but some tokens are down 90% compared to their 2021 peak levels.

These sell-offs have been sparked by concerns about the Federal Reserve’s hawkish policies to control inflation. This has also hurt traditional stock markets. The U.S. central banking plans to raise benchmark rates to 2023. This may reduce liquidity for investors to purchase riskier assets such as BTC or ETH.

A number of liquidity problems and forced selling by the Decentralized Finance sector, also affecting the crypto market have put downward pressure on Ether, limiting its chances of continuing its recovery rally.

Analyst Capo of Crypto states that ETH’s price has not reached its bottom yet and could plummet further towards the $700-$800 mark.

$ETH Main target achieved, bounced from there but not yet in bottom formation. The 5th wave of 5th waves is complete with eyes on $700-800, which would be the new support zone.
— il Capo Of Crypto (@CryptoCapo_) June 20, 2022

ETH price bottom signs?

One metric that measures the difference between Ether’s market and realized values suggests that ETH/USD has reached its bottom.

It is used to determine whether Ether is under- or overvalued in relation to its “fair” value or realized value. It is a bull run peak when Ether’s market value exceeds its realized value.

However, market values falling below realized value have indicated a bearish market bottom (the chart below shows the green zone). Ether’s MVRVZ Score, which entered the same buying area in June and is now consolidating within it.

Ethereum MVRV Z Score. Source: Glassnode

However, this does not necessarily indicate a trend reversal as shown by the MVRV-price relationship during the 2018 bear markets.

Related: 5 indicators that traders can use when a crypto bear markets is ending

Notably, Ether’s MVRV Z-Score fell into the green zone when the price was just $319 on August 12, 2018. The Ethereum token reached its lowest point on December 14, 2018, at $85.

Ether is now at the bottom of its cycle, provided that the on-chainfractal remains valid in 2022.

com. You should do your research before making any investment or trading decision.

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