FameEX Hot Topics | Ethereum Surged 90% After This Indicator Last Turned Bullish

Ethereum’s price has entered a consolidation phase between $2,400 and $2,750 on the daily chart, forming a textbook bull flag pattern. This technical setup typically signals a continuation of a prior uptrend, with the sharp rally from $1,900 to $2,730 acting as the flagpole. The current sideways movement represents the flag portion. A potential breakout above the $2,600 level could lead to a retest of the $3,000 to $3,100 resistance zone—considered the next key hurdle for bulls in the short term.

Technical indicators are offering mixed signals. The 200-day exponential moving average (EMA) continues to provide support at the lower end of the consolidation range, while the Relative Strength Index (RSI) has cooled from overbought conditions. This cooling RSI, coupled with low volatility, could provide room for a fresh move higher. However, a decisive move below $2,400 would invalidate the bull flag formation and expose Ethereum to deeper losses, making the current zone a critical area to watch.

On May 20, Ether also made an attempt to reclaim the mid-line of the 2-week Gaussian Channel, a trend-following indicator that dynamically adjusts to market volatility. Historically, crossing above this mid-line has often led to major price rallies. For instance, Ethereum surged 93% to $4,000 in 2023 following a similar move and rallied 1,820% in 2020, leading to a broader altcoin season. However, a failed crossover in August 2022 during a market correction serves as a reminder that the indicator is not infallible.

Adding to the bullish setup is the formation of a golden cross between the 50-day and 200-day simple moving averages (SMA) on the 12-hour chart, as pointed out by trader Merlijn. A golden cross is a widely followed bullish signal, although it holds more weight on longer timeframes like the daily chart. While encouraging, traders remain cautious, noting that confirmation from daily candles and rising volume is essential to validate any breakout.

Some analysts urge restraint, expecting Ethereum to remain range-bound in the short term. Trader XO highlighted strong resistance below $2,800, warning that failure to break above this level could lead to a corrective phase. Ether recently retested the 0.5 to 0.618 Fibonacci retracement levels—key areas often associated with pullbacks. In such a case, support levels at $2,150 and $1,900 could help stabilize prices but may dampen bullish momentum for several weeks.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.