Dear traders,
Ethereum (ETH/USD) is in a strong uptrend. The bullish momentum is similar or even stronger than Bitcoin’s recent surge above $50k.
But strong bearish candlesticks are now visible on the 4 hour chart… Will this bearish volatility change the outlook? Let’s review the key wave and chart patterns.
The ETH/USD recent surge up has been strong. Price moved from $400-$500 to the $2,000 resistance level in just 3 months.
Now bearish pressure seems to be actively pushing price action lower again. Is this a reversal or just a retracement?
After the price action completes 5 waves (grey) in wave 4 (pink), the uptrend should break the pattern and move north (blue arrow). Only a very deep correction puts the uptrend in doubt (orange and red circles).
On the 4 hour chart, we can see that the ETH/USD bullish momentum is temporarily over. Price has broken below the support trend line (dotted green) and the 21 ema zone.
Price action should be able to reach the 38.2% Fibonacci level where support support is expected. If a triangle pattern does emerge, then there should be multiple ABC patterns visible in each leg.
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.
Leave a Reply