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ETH defends crucial support, bull run to new record high seems intact

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  • Ethereum holds above $1,000, avoiding losses targeting the primary support at $900.
  • ETH network growth has slowed down over the last two weeks, suggesting that recovery will be an uphill task.

Ethereum tumbled in tandem with Bitcoin on Thursdays and the wee hours of Friday morning. Bitcoin brushed shoulders with $30,000 before resuming the uptrend.

Similarly, Ether plummeted toward $1,000 two days after trading a new all-time high at $1,440. Following the breakdown, the digital asset seems ready to break out with gains eyeing levels above $1,400.

Ethereum makes a strong rebound

ETH/USD is exchanging hands at $1,166 after reclaiming the lost ground above $1,100. The 100 Simple Moving Average is limiting movement at $1,200 on the 4-hour chart. Once this resistance is broken, bulls will push for gains toward $1,400. However, the 50 SMA and $1,300 are likely to slow down the uptrend by absorbing some buying pressure.

The Relative Strength Index is rebounding toward the midline. A break past this average will call for more buy orders. Besides, an increase in the tailwind behind Ether will elevate it to the coveted levels beyond $1,400. Closing the day above $1,200 and the 100 SMA may also validate the upswing.

ETH/USD 4-hour chart

ETH/USD 4-hour chart

IntoTheBlock’s “Daily Active Addresses” model shows that the number of new addresses created on the Ethereum network topped-out on January 10 at a high of 170,000 addresses per day, calculated on a 30-day trailing average. Since then, Ether’s network growth has declined by new active addresses per day.

At press time, only 125,000 new addresses were created based on this trailing average, which can be considered a significant bearish sign for Ether.

IntoTheBlock IOMAP chart

IntoTheBlock IOMAP chart

Despite the pessimistic outlook from the network growth, Ethereum’s short-term technical outlook is improving, as seen on the 4-hour chart. Recovery will be challenging, but if the initial hurdle at $1,200 is pushed to the rearview, more buyers will be called to enter the market. Thus, lifting Ethereum higher towards $1,400.

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