Ethereum has been forming an incredibly close correlation to Bitcoin throughout the past couple of weeks
It is attempting to break this correlation now, but bulls are flashing some signs of weakness, especially while looking towards its BTC trading pair
Analysts are now noting that ETH is trading within a crucial range that could determine its future
The upper boundary of this range sits just a hair above where it is currently trading at, but it has already been rejected here
This comes as one analyst notes that ETH/BTC is showing signs of forming a local top
The aggregated cryptocurrency market has been catching some immense momentum throughout the past several days and weeks, but this has not provided Ethereum with any tailwind.
The crypto still remains highly correlated to Bitcoin, and the growth of the DeFi sector hasn’t even had any sway over its price action.
ETH is now trading within a crucial range that analysts are closely watching, as its reaction to the upper and lower boundaries of this channel could determine its short-term trend.
Despite pushing against this range’s upper boundary, analysts don’t believe that the cryptocurrency will be able to surmount it anytime soon.
Ethereum Forms Crucial Trading Range as Correlation to BTC Persists
At the time of writing, Ethereum is trading down marginally at its current price of $237. This is around where it has been trading overnight.
The cryptocurrency is currently sitting above its recent lows of $234 that were seen yesterday, with its latest climb higher coming as Bitcoin attempts to recapture its support at $9,200.
It is important to note that Bitcoin’s price action is the main driver of that seen by Ethereum, as the two assets have formed a tight correlation.
That being said, whether or not BTC can break $9,200 could determine if ETH can surmount $238 – which is the upper boundary of its current range.
One analyst spoke about this short-term range in a recent tweet, noting that it is part of a much larger range between $230 and $250.
“ETH HTF Update: Price back in this range as buyers once again defend that RL at $232, this level continues to be a key level, hoping from here that we can get back above $238… This range has already lasted 50 days… expect a break soon.”
Image Courtesy of Cactus. Chart via TradingView.
ETH/BTC Showing Signs of Forming a Local High
While looking towards Ethereum’s BTC trading pair, analysts are noting that it is showing some signs of weakness.
“ETH BTC: Pretty clear invalidation for bulls; I don’t think price should begin falling back beneath the range high if this is at all bullish. Daily close back beneath could hand us a good short,” one trader explained.
Image Courtesy of Bagsy. Chart via TradingView.
How Ethereum trends as it nears the upper boundary of its crucial short-term range could determine whether it breaks above or below its macro range in the days and weeks ahead.
Featured image from Shutterstock.
Charts from TradingView.