The price of ethereum has declined significantly over the weekend as a result of rising tensions in the Middle East. However, there are still potential support levels available to sustain the price.
ethereum Price Technical Analysis
The daily chart
During the daily period, ethereum price has formed a large bullish flag pattern. The recent decline has briefly pushed the price below the $3,000 support level, but the market has recovered from the lower boundary of the channel. Judging from the quick recovery, the drop below $3,000 can be considered a false bearish breakout.
Therefore, eth price can be expected to rise towards the $3,600 resistance level and the flag upper limit in the coming days. The reaction to these levels can be crucial as it can determine the longer-term market trend.
The 4 hour chart
Falling down to the 4-hour time frame, the price is approaching the short-term resistance level of $3,300. If the market successfully breaks above the mentioned level, it could rally towards the $3,600 resistance and retest it once again.
The Relative Strength Index is also breaching the 50% threshold, indicating that momentum is shifting in favor of buyers and the market could soon return to the upper region of the large channel. Therefore, investors can be hopeful that the long-term bull market is far from over.
Analysis of feelings
ethereum Liquidation Heatmap
Over the weekend, the price briefly fell below the $3,000 support level. This area can be considered a critical zone from the point of view of technical analysis. Therefore, many investors might have put their loss limits there.
This chart demonstrates the liquidation heat map of the Binance eth/USDT pair. The price drop below the $3,000 level has liquidated a considerable portion of the long positions.
Since the cryptocurrency is currently recovering, it can be assumed that the selling pressure resulting from these liquidations has been met with sufficient demand, and the recent drop could have been a bear trap. Therefore, the market may aim for liquidity above the $4,000 level if nothing unexpected happens in the near term.
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Cryptocurrency charts by TradingView.
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