Ethereum Price Prediction: Strong resistance blocks ETH’s foray into $500 – Confluence Detector

• The CFTC chairman has recently heaped praise on Ethereum.
• The price has currently found support at the 50-day SMA.

The Ethereum community got a pleasant surprise this Wednesday when CFTC chairman Heath Tabert heaped praises on the smart contract platform. The regulator compared Bitcoin and Ethereum by analogizing it with email and the internet. According to Tabert, while Bitcoin and email are “one-trick ponies,” Ethereum can have a much broader impact like the internet.

The technical picture

After rising steadily from $320 to $390, the price has encountered resistance and has dropped slightly to $378. Currently, the 50-day SMA has managed to keep the price up. The MACD shows that the market momentum is still bullish, so it could be possible that the price is going through a short-term retracement before making another charge towards the $390 resistance line. 

ETH/USD daily chart

If the bulls break past the $390 resistance line, they should have enough momentum to make a break for the $485 resistance and enter the $500-zone. As per the daily confluence detector, there aren’t any strong resistance levels between $390 and $485. The confluence detector also shows that the smart contract giant is sitting on top of healthy support, aka, the 50-day SMA.

ETH daily confluence detector

To add further credence to our bullish hypothesis, there has been a significant rise in the number of whales holding a considerable portion of Ethereum. As per Santiment’s holders distribution chart, the number of addresses holding 10,000 – 100,000 ETH went up from 961 to 971 from October 8 to October 14. Similarly, the number of addresses holding 100,000 – 1 million tokens rose from 160 to 165 between October 5 and October 14.

Ethereum holders distribution

The flipside: Can the bears push the price down

The bears can take control if they manage to break below the 50-day SMA ($370), proving itself to be a strong support wall. Breaking below this will throw ETH down to the 100-day SMA ($350). These two levels should be strong enough to absorb any selling pressure, capping off the downside at $350. Any break below that will drop the price to the 200-day SMA ($280).

Key price levels to watch

ETH needs to break above the $390 resistance barrier to charge for the $500 zone. Upon conquering the $390 line, the buyers will next need to break past the $485 resistance.

On the downside, the bears can take control by breaking below the 50-day SMA ($370) and following that, the next healthy support lies at the 100-day SMA ($350). These two levels should be strong enough to absorb any selling pressure.