Ethereum Looking to Build on Positive January Signals, Bullish Forecasts

Ethereum (ETH), the second largest global cryptocurrency, produced a bullish intermediate-term trend momentum statement recently and is setting up an even more bullish signal into February. This sets a strong upside potential for ETH/USD for February, for the first quarter, and even deeper into 2023.

Ether Bullish Signals and Prospects

The second largest cryptocurrency, Ethereum, produced a bullish crossover of two key intermediate-term trend momentum indicators recently, with the 50-day Simple Moving Average (SMA) moving above the 100-day SMA.

This intermediate-term trend momentum shift favours further upside gains into Q1 and possibly beyond. Moreover, this positive chart statement has now put in focus a possible crossover of longer-term trend momentum indicators, the 50-day and 200-day SMAs. A bullish crossover of these MAs in technical analysis is called a Golden Cross and signals a far more bullish outlook for the longer-term potentially for the balance of this year.

In addition to the recent bullish crossover and the potential for an even stronger signal, Ethereum has seen strong gains in early 2023, throughout January, which has built on the latter 2022. November and December basing activity. Swing lows in both these months managed to hold at 1073/75 and 1151, notably above support from the summer of 2022 at 1006/997 and significantly above the June 2022 bear cycle low at 880.

Furthermore, the January rally has been driven by a bull gap at 1501-1461 and seen ETH/USD overcome swing resistance at 1351 and more recently to just prod above the high pre-FTX collapse from November at 1676 up to 1695, all adding to the bullish recovery theme.

ETH Upside Forecast

We see the immediate risks into February for ETH to retest the January peak at 1695 and for a possible extension through here to challenge the September and August swing highs at 1789 and 2031 respectively. Above here would open up higher targets for the first quarter, quickly towards 2161 and potentially even as high as the 3035/3180 area. Bigger picture, for 2023, the threat is even higher than here, maybe closer to 3581

ETH/USD Downside Risks

There are also risks that in the short-term, the ETH/USD market sees a downturn and a correction lower, with the key initial support being the bull gap at 1501-1461. A surrender here would favour a deeper setback, maybe towards 1321, which we would look to hold. Should this support be violated, however, the short- and even intermediate-term threat would then likely shift back still lower, with downside targets back closer to 1151 and even back to 1073/75.