The Ethereum(ETH) price dropped by 5.45% last week after the recent threat of increasing interest rates by the Feds. Moreover, the price pattern warns of prolonged selling with the head and shoulder forming in the daily chart. So, should you avoid buying this dip?
Key points from ETH analysis:
- The Falling trend breaks the $1500 mark and struggles to halt near trim support levels.
- The underlying sentiment suggests a downtrend continuation in the coming week.
- The intraday trading volume in Ethereum is $1.34 Billion, indicating an insignificant loss of 35.6%.
Source- Tradingview
Ethereum market value crashed this Friday by 11.5%, resulting in a bearish engulfing candle in the daily chart, facing rejection from the 20-day EMA. The spike in intraday teasing volume reflects an increase in the seeming pressure.
Additionally, the downtrend completes a head and shoulder pattern, with a neckline coinciding at the $1450 support level. Hence, sideline traders can find a short-selling opportunity if a daily candle dumps the ether price below $1450.
Increasing the bearish threat, the Asian market may open negative this week which may further increase fear among eastern investors. Hence, the supply inflow is suspected to rise this week.
The ETH price currently trades at $1491 and is projecting a potential downtrend with the bearish crossover of the 20 and 50-day EMA. If the sellers are successful in the pattern breakout, a downfall might test the next supply level of $1260, accounting for an 12.6% fall.
However, if bulls successfully keep the ETH prices above $1450, a retest of the broken level of $1731 is possible.
Technical indicator-
DMI indicator displays an increase in bearish trend momentum as the ADX line rises while the bearish gap increases between the DI lines.
RSI indicator highlights ETH as nearly oversold as the daily RSI slope maintains a declining trend below the halfway line.
- Resistance level- $1600 and $1730
- Support level- $1430 and $1258
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