- Ethereum’s price is back looking for higher support, preferably above $ 2,000 following a recent rejection.
- An ascending wedge pattern shows Ether starting an 11% pullback to $ 2,000.
Ethereum is back in the red just a day after hitting around $ 2,400. The pioneering smart contract token had led other altcoins to a massive rally, dropping from $ 1,730 to nearly $ 2,400.
Perhaps the failure to close the previous day above $ 2,400 sparked yet another bearish dominance move as sellers rushed to take profit. At the time of writing, Ethereum is teetering at $ 2,176 following a 7% loss in the past 24 hours.
Ethereum price is set to retreat to $ 2,000
The massive recovery towards the end of last week and Monday was remarkable but unsustainable. It appears that the fundamentals haven’t caught up with the colossal price action, or that investors have been quick enough to sell the news. Either way, the fix isn’t unique to Ethereum. Especially with Bitcoin balancing around $ 36,000 after hitting $ 40,000 earlier this week.
At the same time, short-term technical indicators suggest that the correction will continue in the short term. Be aware that the Moving Average Convergence Divergence (MACD) has a sell signal on the four hour chart. The call to sell recently came into play as the 12-day Exponential Moving Average (EMA) fell below the 26-day EMA. The odds of a prolonged correction might shine as the MACD closes the gap from the midline.
Four hour ETH / USD chart
An ascending wedge pattern formation on the four hour chart depicts a bearish picture; hence the expected declines of 11%. It should be mentioned that this pattern forms in the midst of an ongoing uptrend and can be short or long term depending on how long it took to develop. The upper trend line (resistance) and the lower trend line (support) converge as the pattern matures. An increase in volume at the breakout of support functions as a validation of the bearish bias, explaining the gradual pullback from $ 2,400 to $ 2,000.
The 11% or $ 2,000 correction target may not occur if Ethereum holds more than $ 2,100. Here the bulls will focus on returning to $ 2,400 and later to $ 3,000.
Ethereum Intraday Levels
Spot rate: $ 2,180
Support: $ 2,100 and $ 2,000
Resistance: $ 2,400
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