ETH: Path to recovery confirmed, but …

After three consecutive days of the Bitcoin price drop, the market picked up speed again as the king of crypto rose nearly 4% in the past 24 hours. While BTC’s recovery seems slow, the top altcoin has gained some momentum, rising 15% in 36 hours.

ETH 4-Hour Price Chart | Source: Tradingview

As the ETH gains momentum, the market is once again placing its hopes on the top altcoin.

The price is recovering

With positive comments from the Federal Reserve (Fed) reassuring market participants, a rebound seems inevitable. So far, however, the top altcoin has been on a pretty bumpy road. In the past few days, the altcoin has hit a multi-week low of $ 2,652, making a quick jump below the $ 2,800 region.

With ETH trading around $ 3,100 at press time, the price marks a strong rebound from the critical $ 2,800 support.

It is noteworthy that the 7-day MVRV of the ETH recorded a very strong recovery from the lows on September 22nd. This is a sign that the price will rise from the local low. However, if ETH bounces above USD 3,200, the rebound can be confirmed with USD 3,400 as the next resistance.

This, along with the big entry marked by the rising line on the RSI in the lower timeframe, are strong signs of recovery.

ETH price (green) and MVRV rate (pink) | The source: Sanbase

While on-chain data suggests a bullish outlook for ETH, it’s important to note that the eventual decline will be more dependent on macro events like Evergrande’s debt crisis and comments from the crypto-friendly SEC.

Now, while it seems clear the price is recovering, is there a real rally for ETH?

Unsure

Despite the price hike, there is still uncertainty at the time of writing. A disturbing fact about ETH resilience is that network growth is almost stagnant (7-day MA), as Santiment has shown. report.

In the last few months, when the price continued to rise, the number of network participants has not been by leaps and bounds. Such a spread is not a healthy sign.

At the time of writing, ETH (7-day MA) network growth is at its lowest in over a month.

Network growth (red) and ETH price (green) | The source: Sanbase

The decline in ETH network growth can be attributed to Layer 1s like AVAX, FTM, and ATOM, which flourished last month and NFT speculation shrank.

So while a continuously increasing miner coin balance and a slight increase in daily active addresses indicate that the price is recovering, a low network strength leads to a situation that is difficult to predict.

Today will be decisive for the ETH price, especially since September 24th is another important expiration date. This could play an important role in the direction of the top two coins.

While the recovery appears to be beginning, the market may have to wait for the post-expiry scenario for the time being to see which direction the market will go.

Technical analysis

ETH has made both bullish and bearish arguments so far in September: At the beginning of the month, ETH rose nearly 30% to a 16-week high of $ 4,025 and set a new ATH target. However, the market-wide sell-off on September 7th ended that rally abruptly, causing the price to drop 25% instantly.

In fact, as of press time, the market is still suffering from the aftermath of this decline and ETH has failed to break through certain levels of resistance. In addition, the lower trend line has been broken and the price is not yet out of danger.

While some are predicting the price will drop back to late July levels, ETH appears to be rising to prove these skeptics are wrong. Fortunately, bear market expectations may not be justified right now as ETH has been trading above several key price levels. However, an immediate recovery is even less likely.