Ethereum eyes new all-time high after bears unable to sink ETH below $900

The price of Ether is set to test its all-time high in the coming days as Bitcoin leads the market recovery.

Bitcoin’s (BTC) price saw a significant 28% correction during the week from $41,000 to $30,000. At the same time, Ether (ETH) also saw a drop of 32%. The recent high for ETH/USD was $1,350 — or about $70 shy of the all-time high — while the recent low was seen at $910.

January has seen heavy volatility in the crypto markets. The sentiment has been flipping from euphoria to depression and back again. However, the market is still in a bull market even if another correction occurs.

In that regard, it’s just a matter of time until a new all-time high is made for Ether, following Bitcoin's footsteps.

Healthy correction for ETH

ETH/USD 1-week chart. Source: TradingView

Ether corrected to the first level of interest at the 0.35–0.382 Fibonacci level. Traders often use this Fibonacci level to anticipate corrections.

Frequently, corrections only occur at the 0.35–0.382 Fibonacci level or the 0.5 Fibonacci level.

This happened in ETH's case, as the $850 to $925 area is confluent with a previous resistance point. This resistance point is found in 2018 during the multimonth rally from $350 to $900. This slight run-up became the final bounce before the market reversed south.

But now, the $900 region has flipped support, which means that more upside likely. As often stated, if an asset drops by 30% in an uptrend, it may be worth looking into.

Levels to watch after all-time high is broken

ETH/USD 1-day chart. Source: TradingView

If the correction has ended, continuation is likely to occur with a new impulse wave. In that regard, ETH/USD would be looking at new highs, which can also be determined using the Fibonacci extension tool.

Critical for continuation would be a breakout above the recent high at $1,350. Personally, I’d expect to see some more consolidation before continuation, but a new impulse wave is definitely on the table.

If such a continuation of the impulse wave occurs, the next targets are found at the recent all-time high of 2017 (around $1,420), but also at $1,600 to $1,650 and $2,050 to $2,100. The latter targets are constructed using the Fibonacci extension tool.

Sideways action is still more likely in the short term

ETH/USD 4-hour chart. Source: TradingView

Lower time frames are still showing a range-bound construction. It’s arguable that the momentum is very volatile, and the markets are fluctuating by double-digit percentage points on a daily basis.

However, the range-high resistance is found at $1,225 to $1,275, and that has to break to continue the bullish momentum.

If not, Ether will most likely see sideways action. In that regard, a retest of the $900 area is still on the table. In the previous week, the market sentiment turned to fear very fast. Thus, one rejection at the next major resistance and the market may see another correction.

The strength will come from ETH/BTC pair later in the year

ETH/BTC 3-day chart. Source: TradingView

Slowly but surely, altcoin-BTC pairs should catch up, but Bitcoin must stabilize for that to happen. 

Currently, ETH/BTC is making higher lows and flipping previous resistance levels for support. This flip also happened with the 0.025 sats level and served as a signal for more upside. As the ETH/BTC chart shows, compression is building up, suggesting that a big move is brewing.

Most likely, it will take some time and should be expected later in 2021. But once the BTC pair starts to accelerate, Ether could reach as high as 0.056 to 0.08 sats. This would also mean new all-time highs in U.S. dollar terms, of course. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.