After climbing up to $838 for the first time since last March, the market’s bears took the price of ether all the way down to $685 on Monday. Ethereum price overshot temporarily below $713.24 for around 8 hours, before rising again above this significant support level which represents the 61.8% Fibonacci retracement. After recording a day low of $685 on Monday, ethereum price began rising again to reach $744 at the time of writing of this analysis. The price of ether is currently below the rising support level that has been evident since April 7th.
Can we expect the market’s bulls to continue pushing etherum price towards the resistance level around $849.08 within the next 48 hours?
Overshooting below the 61.8% Fib. retracement on the 4 hour ETHUSD chart:
We will study Bitfinex’s 4 hour ETHUSD chart, while plotting the 200 period, 100 period, and 50 period SMAs, as illustrated on the below chart. (Note: we will keep the Fibonacci retracements we plotted during an earlier analysis). We can conclude the following:
- May’s bullish run was halted, after a day high of $838 was scored on Sunday. The market’s bulls failed to test the resistance around $849.08, which corresponds to the 50% Fibonacci retracement (horizontal green line). A downwards price correction attempt was triggered, after the day high was recorded, taking ethereum price down to $685 during Monday’s trading sessions. The downwards momentum slowed down after the day’s low was recorded, and ethereum price started to rise again reaching $744, at the time of writing of this analysis.
- The drop below the 61.8% Fib. retracement ($713.24) was temporary, as it lasted less than 8 hours. This denotes the relative strength of this support level (horizontal orange line), as shown by the length of downwards shadows of candlesticks forming near this price level.
- Currently, the price of ether is below the upwards trend line (blue trend line on the chart) which has been marking ethereum’s price movement since April 7th. This is the second time for the price of ether to fall below this trend line. However, a week ago, ethereum price dropped for only 24 hours below this significant support level.
- During the brief price correction attempt witnessed during the past 48 hours, the 50 period SMA (green curve) represented a level of support that halted the downwards price movement.
- The 100 period SMA (blue curve) has just crossed above the 200 period SMA (orange curve), which represents a bullish signal known as a “bullish crossover”.
Now, let’s study Bitfinex’s 1 day ETHUSD chart, while plotting the RSI indicator, the Bollinger Bands indicator, and the Ichimoku Cloud, as shown on the below chart. We will also keep the same Fibonacci retracements we plotted above. We can conclude the following:
- The bullish run of ethereum price was resisted by Bollinger’s upper band, which was also near the level of the 50% Fibonacci retracement (horizontal green line). Ethereum price bounced off Bollinger’s upper band to plummet below the upwards trend line and drop temporarily below the 61.8% Fib. retracement (orange horizontal line).
- The downwards price correction attempt was triggered when the price of ether seemed overbought as shown by the value of the RSI , which exceeded 70. Nevertheless, the RSI’s value has currently fallen below 70 and its curve is sloping in a downwards direction, which means that ethereum is not overbought any more, and chances are good to see it rise again.
- The Ichimoku Cloud is green in color, so the overall sentiment of the market is still bullish. The Leading Span A line of the cloud is at the level of $680. Accordingly, $680 represents a relatively strong support level during the upcoming 26 days.
Conclusion:
Ethereum price was affected by a downwards price correction wave, after a high of $838 was scored last Sunday. Price correction pulled the price of ether downwards to hit a low of $685.18, before the market’s bulls managed to take the upper hand again. We can expect the price of ether to begin rising again after successfully stabilizing above the support level near $713.24.
Charts from Bitfinex, hosted on Tradingview.com
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