Ethereum price has moved sideways in the past few days as the market sentiment improves. ETH is trading at $1,223, which is about 38% above the lowest level this year. Other top cryptocurrencies like Bitcoin, Ripple, and Bitcoin Cash have been consolidating. On the other hand, some small-cap coins like SPELL, Mirror Protocol, QLC, and NAS have all gone parabolic.
ETH and Nasdaq correlation
Ethereum is a leading blockchain project that enables developers to build decentralized applications (dApps) in all industries like DeFi and non-fungible tokens (NFT). It is the most widely-used blockchain project. Some of the most notable projects in its ecosystem are ApeCoin, Aave, Uniswap, and Curve Finance among others.
Like all cryptocurrencies, Ethereum price has been in a strong sell-off this year as investors continue worrying about digital coins and the rising interest rates. It has moved from close to $5,000 in November last year to a year-to-date low of $877.
Ethereum also collapsed because of the rising concerns about its key industries like DeFi, Non-Fungible Tokens (NFT), and the metaverse. The volume of all these industries has been dropping in the past few months.
For example, the total value locked of Ethereum DeFi protocols has moved from over $150 billion to less than $50 billion. Similarly, the volume of NFTs traded has dropped while the number of metaverse gamers in platforms like Decentraland and Axie Infinity has been in a downward trend.
Still, there is one reason that could comfort Ethereum investors. This is the fact that Bitcoin and Ethereum have a close correlation with the Nasdaq 100 index. Historically, the Nasdaq and other American indices tend to bounce back from their bear market. Therefore, there is a likelihood that Ethereum and other coins will recover when the Nasdaq 100 index bounces back.
Ethereum price prediction
Turning to the four-hour chart, we see that ETH price has formed an inverted head and shoulders pattern. This pattern is usually a bullish sign. The price is now slightly above the neckline of the pattern. It is also slightly above the 25-period and 50-period moving averages. The Vortex Indicator has also formed a triangle pattern as it converges.
Therefore, because of the H&s pattern, there is a possibility that ETH price will continue bouncing back in the coming days. If this happens, the next key resistance is at $1,421. A drop below the support at $1,195 will invalidate the bullish view. Sign up to our highly accurate S&R indicator for an updated Ethereum price forecast.