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Ethereum Still ‘Cheap’? Rainbow Chart Says the Rally Isn’t Over

Ethereum (ETH) price chart

Ethereum is buying and selling at round $3,900 at press time, posting a slight acquire over the final 24 hours. The previous week has seen a 3% pullback.

Despite the dip, market watchers say circumstances stay favorable, backed by long-term chart buildings and alternate exercise.

Ethereum Holds Green Zone in Rainbow Model

The Ethereum Rainbow Chart, shared by Merlijn The Trader, locations ETH in what the mannequin labels as the “Still Cheap” zone. This band sits beneath the historic “HODL” and “Take Profit” areas, which have marked overheated circumstances in earlier cycles.

Merlijn wrote,

“Every main backside has the colour blue. Every prime is crimson… Right now? ETH continues to be in ‘Still Cheap’ territory.”

According to the chart’s historic habits, Ethereum just isn’t exhibiting indicators of being overpriced and will have room to advance.

Ethereum (ETH) price chart
Source: Merlijn The Trader/X

Breakout Confirmed After Two Years of Rejections

Ethereum not too long ago broke above a resistance stage that had held since November 2021. After dealing with a number of rejections in previous cycles, ETH closed above the trendline and has since returned to check it from above. That retest has up to now acted as help. Said EtherNasyonaL,

The transfer alerts the finish of a protracted consolidation interval. If the value holds above the retest zone, the chart factors to a attainable continuation into greater ranges.

Ethereum is buying and selling just under a key stage final reached earlier than the 2020 rally. Then, as now, the value stalled at resistance after months of sideways motion.

Exchange Balances Fall as Supply Drops Off Market

According to CryptoQuant, ETH reserves held on centralized exchanges have dropped to fifteen.9 million, down from over 20 million in late 2024. The regular decline displays motion away from exchanges, usually linked to long-term holding, staking, or chilly storage.

Ethereum Exchange Reserve - All Exchanges (3)
Source: CryptoQuant

Despite the provide shift, the value has held close to latest highs. This suggests demand stays regular, or that sellers will not be energetic at these ranges. Reduced alternate balances have traditionally appeared throughout early levels of accumulation phases.

Short-Term Levels to Watch

In the shorter time-frame, analysts stay cautious. Ali Martinez suggests ETH might transfer again towards $3,700 if it fails to reclaim greater ranges. Resistance stays at $4,100, a zone that a number of merchants are monitoring for affirmation of bullish continuation.

Ted Pillows added,

“Until ETH totally reclaims $4,100 stage with robust institutional influx, I believe most pumps will likely be retraced.”

Lennaert Snyder pointed to $3,740 as a latest bounce zone and marked $4,050 as resistance. Short-term strikes stay unsure, however the broader value construction continues to carry.

The put up Ethereum Still ‘Cheap’? Rainbow Chart Says the Rally Isn’t Over appeared first on CryptoPotato.

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