Ethereum bulls have had to endure a torrid January 2022. After what promised to be a bright start, ETH/USDT prices sank in the second half of the month to spot rates.
Technically, Ethereum is roughly 45 percent down from November 2021 peaks. There could be signals of strength in ETHUSDT price formation in the daily chart.
Nonetheless, traders need more confirmation to buy the dips. It is because their optimism could quickly turn to catching a falling knife when rampant sellers dash bulls’ hopes.
Thus far, there are classic indicators that attempts of the last week of January 2022 concluded a bear flag –a confirmation of sellers. This preview could only change if there is a solid close above $2.7k in continuation of buyers of mid-last week.
The Rise of Layer-2 TVL
Ethereum’s path is bullish for prices from a fundamental perspective, especially on scalability matters.
The shift of strategy to prioritize layer-2 scaling ahead of the merger could lead to a multiplicative effect once on-chain solutions like Shards come to effect later.
Thus far, solutions like Arbitrum and other Rollups options are gaining traction. Even in a bear market, the Total Value Locked (TVL) in off-chain scaling channels exceed $5.2 billion, indicating confidence and general allegiance to Ethereum—despite its fragilities.
Ethereum Price Analysis
There are a series of higher highs relative to the lower BB in the daily chart, signaling strength amid intense selling pressure.
Although buyers are optimistic following encouraging gains at the tail end of January 2022, the upward pressure isn’t convincing for risk-averse traders.
Technically, a close above $2.7k might be the trigger for the next leg up to $3k—and better—in trend continuation.
Presently, the ETHUSDT price formation is within a bear flag due to the inability of optimistic buyers to unwind losses of January 21 and 22. From an effort-versus-results perspective, this is also bearish.
Therefore, if buyers take charge, a conservative strategy is to load on breakouts above $3k. Still, there could be an opportunity for aggressive traders above $2.7k—confirming buyers of January 28.
In that case, ETH could float back to $3k—the immediate buy target. If not, losses below $2.3k may embolden bears aiming at $1.7k—July 2021 lows.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
If you found this article interesting, here you can find more Ethereum News