2023-05-17 10:40:50
Ethereum (ETH) remains under pressure, finding strong resistance between the $1,850 and $1,900 zone. Currently, traders can start looking for opportunities to open short positions, at least for now.
However, for this to materialize and support the conservative trader’s outlook, there needs to be a strong close below $1,740 or last week’s lows.
This might signal continued selling pressure from mid-April 2023.
ETH prices are consolidating with clear caps, albeit with reduced selling momentum. This is due to the divergence from the lower Bollinger band.
Memecoin FOMO Decreases as Optimism Plans Bedrock Update
Fundamentally, Ethereum remains the leading smart contract platform, judging by the activity and popularity of some of its projects.
Although the fear of missing out (FOMO) on memecoins is waning, some tokens, including PEPE and LADYS, are attracting decent volumes on centralized exchanges.
The shift away from the Uniswap decentralized exchange appears to have helped alleviate the network from the unsustainably high Gas fees that plagued the platform, allowing critics to point to the network’s scalability efforts.
While Ethereum finds relief, Optimism, a Layer 2 scaling platform, plans to integrate improvements established under the Bedrock release.
The update is scheduled for early June and might lay the groundwork for making Optimism even cheaper to use. Optimism also plans to introduce improvements for security and usability.
Whether Optimism will overtake Arbitrum as the most widely used Layer 2 platform remains to be seen. According to L2Beat data, Arbitrum manages assets worth more than $5.5 billion, almost three times the total value locked (TVL) in Optimism.
ETHEREUM (ETH) PRICE ANALYSIS
Overall, reading from a top-down preview, Ethereum is in an uptrend. This follows the sharp price expansion since mid-March 2023 that saw the coin float to $2,100.
At current rates, ETH is retesting the February highs, which is critical for buyers. This means that the uptrend is still strong and the contraction is welcome. If there is any good left of this, it is that it can allow traders to support a continuing buying-ahead trend..
Selling momentum is currently waning as bears diverge from the lower Bollinger band, which might be a relief for ETH holders.
This outlook will only change if there is a sharp drop below the $1,740 and $1,700 support zone, supported by expanding volumes. In that case, ETH might retest $1,500.
Technical graphics courtesy of Trading View.
Disclaimer: The opinions expressed do not constitute investment advice. If you want to make a purchase or investment, we recommend that you always do your research.
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