As the crypto market bounces, a key indicator has flashed a key bullish signal on the Ethereum (ETH) daily chart, suggesting the end of its six-month downtrend could be near. However, some analysts have warned investors of a possible bull trap and a subsequent reversal to new lows.
Ethereum Eyes Trend ReversalEthereum kicked off the week by breaking above $2,200 for the first time in weeks, reaching a one-month high of $2,320 on Monday morning. The cryptocurrency has been trading between $1,825 and $2,150 since the early February crash, failing to break out of this range despite multiple attempts.
In addition, it has moved above the 50-day Moving Average (MA) for the first time in 56 days and is back into the 12H Ichimoku Cloud for the first time in 55 days.
Analyst Ali Martinez shared that another key indicator used to identify the current market trend had flashed its first bullish signal in six months, which “just signaled the end of the downtrend.”
As he noted, in the last two instances in which the SuperTrend showed a Buy signal, Ethereum rallied 52% and 174%, with the latest move leading to its August all-time high (ATH) of $4,946.
“We’ve survived the grind from September to March,” the analyst asserted. “The next key levels to watch are $2,400 and $2,600.”
Breakout Or Bull Tap?“IMO, ETH could tap the $2,400 zone, as I have been saying for days, before a reversal to new lows,” the X post reads.
He suggested that both liquidity clusters will be taken out in the near future. “First, Ethereum could rally towards the $2,400 level to wipe out late shorts. Then, ETH will start its reversal and hit new lows,” he cautioned.
