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.