Ethereum price has been showing strength while the big crypto takes a backseat. This development has allowed ETH to set up a new all-time high. Although this upswing is slow, things will change soon as the smart contract token is likely to shed the weight on a minor retracement before blasting off to new psychological levels. This technical formation indicates that a continuation of the upswing will likely form a red ‘one’ sell signal that forecasts a one-to-four candlestick correction. Therefore, investors need to watch for a downswing toward the immediate demand zone, extending from $3,888 to $4,222 if the $4,421 support level breaks. While this correction might seem bearish, it will allow short-term investors to book profit, releasing the weight from the bulls. Hence, this pullback will set the stage for a move that pushes ETH to new highs.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The trend-based Fibonacci extension level at $5,163, or the $5,000 psychological level is the first target that the bulls will lock onto after this retracement as the long-term outlook for ETH continues to remain extremely bullish. In some cases, the uptrend could continue to the next level at $6,723 or extend toward the $7,000 psychological barrier. Supporting the short-term outlook for ETH is the 30-day Market Value to Realized Value (MVRV) model. This on-chain metric is used to determine the average profit/loss of investors that purchased ETH over the past month.

The fundamental index is at 19, a level ETH previously tagged on September 1 and October 20. On both occasions, ETH price dropped 16.5% and 5.15%, respectively. Technicals are in line with this as they predict a 7% correction to the $3,888 and $4,222 demand zone.

Ethereum needs to exit the oversold conditions

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