Ethereum Faces Resistance at $2.4K, Head and Shoulders Pattern Emerges
Ethereum’s recent surge in momentum hit a roadblock as it reached a key resistance area at $2.4K. This resistance is formed by the upper boundary of a multi-month wedge and the static resistance level. A head and shoulders pattern has also appeared, indicating a potential retracement towards the $2K support zone.
The Daily Chart
Ethereum experienced a strong uptrend, reaching a yearly high of $2.4K. The daily chart shows a golden cross, signaling overall bullish sentiment. However, the price encountered resistance at the critical zone, leading to selling pressure. The emergence of a head and shoulders pattern, along with bearish divergence on the RSI indicator, suggests downward movement in the near future. A breach below the pattern’s neckline could lead to a retracement towards $2K.
The 4-Hour Chart
On the 4-hour chart, Ethereum found support within the Fibonacci retracement levels of 0.5 and 0.618. This support range aligns with a supportive trendline, providing additional strength against sellers. However, if sellers gain control and push the price below these levels, a notable cascade could trigger a retracement towards $2K.
On-chain Analysis
An analysis of Ethereum’s futures market reveals insights into its overall outlook. The open interest metric indicates volatility and potential market reversals. While open interest has been trending upward, it has not yet reached levels seen during significant highs. This suggests that while corrections are possible, the futures market is not overheated. The ongoing bullish trend is expected to continue in the long term, but monitoring this metric is crucial for detecting any shifts in market sentiment.
Hot Take: Ethereum Faces Resistance and Bearish Patterns, Potential Retracement Ahead
Ethereum’s recent resistance at $2.4K and the emergence of a head and shoulders pattern indicate a potential retracement towards the $2K support zone. The daily chart shows bearish signals, including the pattern and bearish divergence on the RSI indicator. The 4-hour chart highlights the importance of the Fibonacci retracement levels as support. On-chain analysis suggests that while corrections are possible, the futures market is not overheated. Overall, Ethereum faces challenges in its upward momentum, and a retracement could be on the horizon.
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