the Ethereum (ETH/USD) has broken below the 21 ema zone. A bearish retracement is now taking place. What will be the key breakout and what are the bearish targets?
The ETH/USD is unable to break back above the 21 ema zone, which is a bad sign for the bulls. The previous uptrend was strong but the bears are likely to push price action below the long-term support trend line (purple). A breakout below that line and the previous bottom favours a further drop towards the next two support zones (green boxes). The first support zone is a confluence with the previous top, -27.2% Fibonacci target and the 50% Fibonacci level. The second support zone is the previous sideways zone, the -61.8% Fibonacci target and the 61.8% Fibonacci retracement level.
The bearish pressure is even more visible on the 4 hour chart. The red candles from our EW software confirm bearishness and price action is now clearly below the long-term moving averages. A break and pullback followed by another break lower is expected (see arrows). The wave patterns suggest a bearish ABC (purple) pattern. The ABC could complete a wave 1-2 (grey) on the daily chart.