Ethereum is currently on the cusp of breaking back into its long-established trading range between $230 and $250.
A recent influx of selling pressure experienced by the cryptocurrency forced its price to break below the lower boundary of this trading range for an extended period of time, with ETH even testing its crucial support at $220 on a couple of occasions.
This price action has represented an underperformance of Bitcoin – as the benchmark cryptocurrency only broke below its established trading range for an incredibly short period of time.
One analyst is now noting that he believes Ethereum is on the cusp of entering a new bull phase, with its macro price structure beginning to show signs of strength.
He supports this notion by pointing to the fact that the past couple of months has been one of the few times when the crypto has been able to sustain above $200 for over a month.
This “new bull phase” could also be fueled by a mounting narrative regarding the cryptocurrency’s underlying strength.
Ethereum’s Technical Outlook Strong Despite Range-Bound Trading
At the time of writing, Ethereum is trading up just under 2% at its current price of $229. The crypto has been trading around this price region for the past several days and weeks, struggling to garner any clear momentum in either direction.
It does appear that bulls are attempting to push ETH back into its long-held trading range, as it has been stuck beneath this level for an extended period of time.
If buyers surmount the resistance it appears to be facing around $230, it could be well-positioned to push up towards its range highs at $250.
One analyst recently explained why he feels the crypto is entering a fresh bull phase, explaining that its ability to hold above $200 for a multi-month period bodes well for its high time frame outlook.
“ETH HTF Update: Previously every time PA broke above $200 we saw a very quick and very fast dump back below $200 within the first monthly period. This time looks different… Current candle structure is looking great and I think we could really be heading into a new bull phase,” he explained.
Image courtesy of Cactus. Chart via TradingView.
Bullish ETH Narrative Blossoms with DeFi Sector’s Growth
The growth of the Ethereum-based DeFi sector has fueled a new wave of bullish Ethereum narratives, with many speculating that the money and users that DeFi is attracting will ultimately boost the cryptocurrency’s price.
Ryan Adams, the founder of Mythos Capital, spoke about this in a recent tweet, explaining that the “DeFi boom = ETH moon” narrative is convincing.
“I’m a fundamentals investor, I don’t dabble much with narrative investing. But if I was I’d put money on this… DeFi boom = ETH moon. Nothing’s certain. But linking the DeFi boom to ETH price appreciation is one of the most obvious narrative plays I’ve seen in crypto,” he explained.
Featured image from Shutterstock. Charts from TradingView.