Critical Ethereum Pullback Offers Sidelined Investors Long Entry

Ethereum staged a notable price pullback alongside Bitcoin last week after the largest altcoin failed to break above its critical monthly resistance at $390. ETH was primarily weighed down by negative sentiment surrounding the cryptocurrency exchange OKEx suspending client withdrawals. 

Bearish News Keeps ETH Below Resistance

The latest price action comes at a critical time for Ethereum since a breakout above $390 could set a strong bullish tone for the following days and indeed weeks to come. 

However, the longer ETH struggles to penetrate above the $390 resistance zone; the downside risks may intensify, causing the cryptocurrency to slip back towards the $340 support area.

ETH/USD Daily Chart. Source: TradingView

According to IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP), 1.37 million addresses have purchased 2.2 million ETH at an average price of $382 with a maximum price of $388. As such, this level has remained a critical area to watch for buying pressure. 

However, trading volume needs to increase to facilitate an imminent break above the $390 resistance zone since ETH has been facing criticism over severe network congestion issues.

Ethereum IOMAP Chart. Source: IntoTheBlockFundamentals Paint Bullish Long Term Picture

Heath Tarbert, the chairman of the U.S. Commodities and Futures Trading Commission (CFTC), recently doubled down on his support for Ethereum due to its technological advancement. 

"If Bitcoin is email, a one-trick pony…but obviously revolutionary, Ethereum goes far beyond that, it's more like the internet.

When I think about DeFi, it's obviously revolutionary & could lead to a massive disintermediation of the financial system."

– @ChairmanHeath CFTC

— Ryan Sean Adams – rsa.eth