Ethereum Tests $4.2K Before Pullback, Analyst Warn on Buying at Highs

Ethereum ($ETH) made a sharp move upward, briefly sweeping the $4,200 level before retreating to around $4,100.

Given the strong bullish momentum, some analysts caution that entering at such high price levels carries increased risks.

Michaell van de Poppe, a popular crypto trader and analyst, has explained that since Ethereum seems to be forming a breakout and going on to new all-time highs, the level where it currently sits is not that favorable for an entry point.

He added that a quick-hit investment in Ethereum in the broader Ethereum ecosystem, such as Layer-2 products or ETH-based DeFi protocols, could yield superior returns in the short run.

Ethereum’s Technicals Point to More Bullish Momentum

On the daily chart, Ethereum’s Relative Strength Index (RSI) sits at 72, indicating buyer-dominant conditions. This may be an indication of a well-established bullish momentum, but it will also reflect that there might be a short-term pullback before further bullish gain.

To improve the bullishness, the MACD has verified a crossover of the 186 and 196 levels a buy signal that can be considered as a momentum switch to the buyers.

That goes together with the recent rally in ETH that has gone through resistance, but traders will be looking out to see whether the asset sustains itself above crucial support ranges.

Eyeing All-Time Highs

Closing above the $4,200 resistance on a weekly time frame places the asset close to breaching its all-time highs that were last observed at the height of the bull market about a year ago.

The traders are, however, divided in terms of whether the ETH price will make an immediate jump higher or stagnat, followed by yet another leg up.

In case the bullish structure proves itself and the buying pressure remains, then a charge to an unknown territory may occur.