Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be construed as investment advice.
A decisive close below Ethereum’s daily 20-SMA (red) put sellers back into the mix after minor gains were seen. The ETH channel can be expected to be in the limelight again in early to mid-August as buyers find new momentum.
It’s also important to understand that the liquidation on September 7 was not even close to that seen on May 19. However, the same could result in heavy losses if buyers are not careful.
At the time of writing, Ethereum was trading at $ 3,295, down 2.7% in the past 24 hours.
Ethereum Daily Chart
ETH can be expected to find resting ground between $ 3,000 and $ 3,550 before the next big market swing. The aforementioned channel had previously triggered a period of consolidation as ETH cooled after a rally that continued from its July lows.
Given the recent pullback, ETH was still in a bullish shape at the time of release. The price was trading above its 50 (yellow) and 200 (green) simple moving average lines.
However, it is important for ETH to hold a position above its 50% Fibonacci level to maintain a bullish narrative. Failure to do so would push the price towards the 38.2% Fib mark, from which short sellers will carry the threat of further declines.
On the flip side, an immediate close above the 20-SMA would alleviate many uncertainties in the market, although a retest of $ 4,000 is unlikely. Not until ETH indicators can reverse their bearish signals.
Most of the ETH indicators have formed bearish patterns. The MACD fast line slid under the Signal line. This paved the way for further losses while below the half line. Meanwhile, the buying force was limited in the market as the Awesome Oscillator formed two peaks but failed to climb any higher.
At the time of going to press, the AO was threatening to close below its midline – an Aa development that typically triggers short selling.
Finally, the RSI appeared to ignore these bearish predictions. The index continued to trade near equilibrium and did not give in to downward pressure.
As there appeared to be evidence of buying pressure, ETH has the potential to stem the incoming losses. As a result, we can expect the price to stabilize between $ 3,000 and $ 3,550, before a larger trend takes over.
The RSI, MACD and Awesome Oscillator were trading above their half lines but carried some threat going forward. If these indicators keep moving south, a few more losses would line up for the world’s second largest digital asset.
In order to maintain a bullish thesis, ETH would need to hold over $ 3,000.