Technical Analysis
After failing to break through the $2.6K resistance, Ethereum experienced a significant decline, breaking multiple support levels. However, it has now reached a substantial support zone, indicating the possibility of a bullish reversal.
Ethereum Price Analysis: The Daily Chart
An analysis of Ethereum’s daily chart shows that it faced rejection at the $2.6K resistance, resulting in a 20% decline. It also broke through two important support zones, indicating selling pressure. Additionally, there is a bearish divergence between the price and the RSI indicator.
However, Ethereum is approaching a strong support zone at the 200-day moving average and $2.1K, which could lead to a potential reversal and consolidation phase.
The 4-Hour Chart
Looking at the 4-hour chart, Ethereum encountered selling pressure after a surge and broke below the ascending trendline. It has now reached a significant support region at $2.1K, which has been a strong barrier against sellers.
The expectation is that the price will find support at $2.1K and enter a consolidation stage between that level and the $2.5K resistance. However, if there is a bullish retracement to the broken trendline, it could signal a continuation of the bearish trend.
On-chain Analysis
An analysis of the futures market reveals an interesting signal amidst Ethereum’s decline. Open interest has decreased significantly, indicating a cooling-off in market sentiment. This suggests that there is potential for the price to resume its upward trajectory once the correction phase ends.
Hot Take: Potential for Bullish Reversal as Ethereum Finds Support
Ethereum has faced a significant decline after failing to break through resistance levels. However, it has now landed at a substantial support zone, suggesting the possibility of a bullish reversal. Technical analysis of the daily and 4-hour charts indicates that Ethereum could enter a consolidation phase between $2.1K support and $2.5K resistance. Additionally, on-chain analysis shows a decline in open interest, indicating a cooling-off in market sentiment. This suggests that once the correction phase concludes, there is potential for the price to resume its upward trajectory. Keep an eye on Ethereum as it finds support and potentially enters a bullish reversal.
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