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Ethereum Soars as S&P 500 Tries to Rebound: What’s Happening? – Ethereum (ETH/USD)

Ethereum ETH/USD jumped more than 5% at one point during Tuesday’s 24-hour trading session, attempting to regain the eight-day exponential moving average as support.

The upward movement came in tandem with the S&P500which rebounded slightly to trade up 0.56% before reversing to mostly flat.

A rebound in major indices and the crypto sector was the most likely scenario due to the large price drop that has dominated the stock market since Tuesday, December 13.

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As the S&P 500 rebounded from below-average volume, Ethereum were seeing a high level of volume, suggesting that the bulls may be trying to regain control.

Volume is the total number of shares, coins or tokens traded in a security during a given period. It is a momentum indicator used by technical traders to gauge the general interest and sentiment of a stock. Volume is also used as an indicator to confirm a trend or a change in trend.

When bullish trading volume increases, the stock price generally increases, while increasing bearish volume, when a stock is in a downtrend, usually causes the price to fall. In contrast, below-average trading volume usually indicates consolidation that causes stocks to trade sideways.

  • When a bullish trader has a position in a security, the drop in volume can serve as a sell signal as it indicates that the stock is short of buyers. When the increase in volume eventually pulls the stock out of the sideways range, bullish traders may choose to enter a position if the stock begins to rise.
  • A bearish trader in a short position can watch declining bearish volume to indicate that the stock is short of sellers and a reversal may be in the cards. If a large bearish volume eventually picks up and breaks the stock out of a consolidation pattern, bearish traders may choose to go short.

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The Ethereum chart: As of noon Tuesday, Ethereum volume reached around 272,000 on Coinbase, compared to a 10-day average of 282,663. At 7 p.m., the end of the 24-hour trading period, Ethereum volume will be above the average, indicating that the crypto could attract interest from bulls.

  • The upward movement also caused Ethereum to cancel a possible bearish flag that had developed between December 14 and Monday. When creating the bearish flag, however, Ethereum reversed its uptrend, which is potentially bearish.
  • If Ethereum closes the trading day near its high price for the day, the crypto will print a Bullish Marubozu candlestick, which could indicate that higher prices are forecast for Wednesday. If Ethereum closes the trading day with a substantial upper wick, it could indicate that the crypto will be trading lower, which could confirm a new downtrend.
  • Ethereum has resistance above $1,231.28 and $1,421.80 and support below at $1,081 and $905.

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