The Ethereum price crawled back on Thursday as the market sentiment improved. The ETH price is trading at $3,115, which is about 10% above the lowest level this week.
Why is ETH rebounding?
There are several reasons why the ETH price is rebounding. First, a sell the rumour, buy the news situation is going on in the financial market. In the past few weeks, most asset prices like stocks and indices have all declined as investors wait for the Federal Reserve.
Most analysts were expecting the Fed to deliver a relatively hawkish statement. This happened on Wednesday as the Fed hinted that it will likely start hiking interest rates in the coming year.
The bank also hinted that it will start winding down the asset purchases program soon. Therefore, assets like Ethereum and stocks rose because this is what analysts were expecting.
ETH is also rebounding as investors buy the dips. After having a strong recovery last month, the token declined into a bear territory this month. Therefore, there are many investors who believe that the coin will continue its bullish trend soon.
Third, the jump is also because the fears if Evergrande collapse seems to have eased. While the company still faces a difficult period, there are signs that it will address its immediate challenges. Some analysts believe that the company will be able to restructure its finances using local governments. The stock jumped by more than 20% today.
Ethereum price forecast
In my last article on Ethereum price prediction, I warned that the coin was ripe for a major meltdown. This forecast was accurate as the coin crashed to the lowest level since August.
Now, the daily chart is showing mixed pictures about the coin. On the one hand, ETH has formed a cup and handle pattern that is usually a sign of a bullish continuation. At the same time, it has formed what looks like a head and shoulders pattern, which is often a bearish sign. The MACD has formed a bearish divergence pattern.
Therefore, at this point, there is a blurry vision about ETH. In my view, while this rebound is welcome, bulls will need to clear the 25-day and 50-day moving average to validate the bullish view. On the flip side, a drop below $3,000 will signal that there are still more bears in the market.