Ethereum’s uptrend came to a halt after hitting the biggest resistance at $1.7K. The price action looks choppy, while a short-term correction is what many are hoping for.
Technical analysis
By Shayan
the daily chart
Ethereum has broken above the 200-day moving average and the multi-month channel upper trend line due to the recent bullish move across the market. However, the price declined from the main resistance level of $1.7K and is now consolidating below.
On the other hand, there is a substantial bearish divergence between the price and the RSI indicator on the daily time frame. It could generate volatility in the coming days.
However, there are three critical static levels for Ethereum on the daily chart; the $1.7K major resistance level, the $1.3K minor support level, and the $1K major support level.
The price has been hovering between $1K and $1.7K for several months, and the minor support level of $1.3K is likely to be the next stop for Ethereum in the event of a rejection of $1.7K.
The 4 hour chart
Ethereum price action appears to be bearish on the 4-hour time frame as it has been forming a rising head and shoulders pattern, also known as a three-pulse pattern, a popular reversal pattern in classic price action. , after reaching a region of vital resistance.
If the cryptocurrency cascades below the neckline, around $1,500, the market should expect a short-term nose dive towards the minor support level of $1,300. Therefore, considering the current price action and the aforementioned bearish signs, Ethereum is likely to see a period of consolidation correction before the next impulsive move.
chain analysis
By Shayan
The chart below shows the 14-day RSI of the open interest metric alongside the price of Ethereum. Following the recent bullishness in the price of Bitcoin over the past two weeks, ETH has also been on the rise, showing signs of demand in the market.
As a result, futures market activity has also increased in the past week, resulting in an uptrend in Ethereum open interest. Normally, when the RSI of Open Interest reaches the red zone (above 70), the possibility of a short-term correction is extended.
Currently, the metric has skyrocketed and is close to entering the red area. Consequently, a short-term nosedive could wipe out highly leveraged long positions. This structure underscores the risk of the short-term futures market.
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cryptocurrency charts by TradingView.
