ETH Breaks Out After Bullish Divergence, Altcoin Momentum Building

Ethereum (ETH) has staged a powerful rally following a bullish divergence spotted three weeks ago — a move that leading crypto analyst Michaël van de Poppe says confirmed a trend reversal and "massive breakout."

Ethereum (ETH) has encountered a setback in its bullish run, pulling back from a key resistance level that could invite further price declines, according to a prominent crypto analyst.

In a recent post, Michaël van de Poppe, a well-known analyst on crypto social platform X, noted that ETH experienced a fib level rejection at $2,075. This resistance point is recognized by many traders and analysts, setting the stage for a potential shift in momentum.

As seen on the chart, ETH/USD encountered resistance at the 0.382 fib level from the 2023 low, leading to a reversal and a return to the 0.236 fib level.

Additionally, the analyst pointed out that the 3-day mamac indicator, which measures the strength and breadth of a market trend, is currently flashing green, signaling strong bullish pressure. However, with the fib level rejection and the potential for further price declines, the bullish trend might be pausing for a brief respite.

Despite the short-term pullback, the broader outlook on ETH remains optimistic.

Earlier, another crypto analyst, Pectra, highlighted the significance of retail traders' sentiment in the broader crypto market.

As seen in the chart, retail traders' sentiment toward cryptocurrencies, as measured by the American Association of Individual Investors (AAII), reached a 14-week low in the latest reading.

Whenever retail traders get pessimistic to such extremes, it usually marks a bottom in the market, and a rapid recovery follows.

This aligns with the common wisdom in investing that "most people are wrong," and in a bull market, it’s best to be contrarian to the majority view.

At the time of writing, ETH is trading at $1,930 and is down 16% from its all-time high in 2021.

News data source: kdj.com

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