Will Ethereum Consolidation Lead to a Major Leap?
The Ethereum price has been consolidating between $2133 and $1917 throughout November. This sideways movement has formed a bearish reversal pattern called a double bottom, suggesting the possibility of further downside for ETH.
The Overhead Supply and Strong Support
- The $2133 level acts as an overhead supply, assisting sellers in forming the double bottom pattern.
- The $1917 level, along with the 32.8% Fibonacci retracement level, creates a strong support zone for ETH.
- The intraday trading volume in Ether is $10.5 Billion, indicating a 16% gain.
During the consolidation phase, the Ethereum price has faced resistance at $2133 twice, indicating significant overhead supply. This has led to the formation of a bullish reversal pattern called a Double Bottom on the daily timeframe chart.
Currently trading at $2,025 with a 1.6% intraday loss, ETH is approaching the neckline support at $1,970. A bearish breakdown below this support could intensify selling pressure and potentially cause ETH to drop to around $1700, resulting in a potential loss of 12%.
However, recent price rejections around the psychological support of $2,000 suggest that buyers are trying to counter the bearish setup. If this buying pressure continues, the ETH price may rebound and challenge the last swing high at $2133 and the upper trendline of a long-standing wedge pattern.
ETH Price Recovery to $3400
Over the past 20 months, the ETH price has seen a shallow recovery within a rising wedge pattern. Historically, the upper boundary of this trendline has caused increased supply pressure and significant corrections. Therefore, a definitive breakout above this upper trendline is necessary to confirm a bullish trend. If a breakout occurs, it could potentially drive prices up to $3400.
- Relative Strength Index (RSI): A sharp drop in the daily RSI slope indicates a bearish divergence with the Ethereum price, suggesting potential upcoming downturns.
- Bollinger Bands: The converging boundaries of the Bollinger Bands indicate an uncertain market sentiment for Ethereum.
Hot Take: Ethereum Consolidation Signals Uncertainty but Rebound Potential
The consolidation phase of Ethereum has formed a bearish reversal pattern, but recent price rejections suggest that buyers are fighting back. The key levels to watch are $2133 as resistance and $1917 as support. A breakout above resistance could lead to a potential rally towards $3400. However, a bearish breakdown below support could result in a drop to around $1700. Overall, the market sentiment for Ethereum remains uncertain, and traders should closely monitor these levels for potential trading opportunities.
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