Ethereum price is set to close the week in the green, although a bull trap looms
|- Ethereum price is set to close out the week with solid gains.
- ETH price is at risk of a bull trap as price action slip below a crucial technical cap.
- Expect to see a possible drop should the market turn negative and dollar strength kicks in again.
Ethereum (ETH) price has been trading quite strong in a very nervous week where traders were thrown left and right, being up one day in the European session and the next day losing everything at the end of the US closing bell. Bulls could still eke out solid gains for the week, with a lot of cash being burned in the process. However, a slight fade pushed price action below the important price cap, which could be enough to trigger a bull trap and see price action collapse next week.
ETH price set to collapse next week
Ethereum price still has some hours to go if it wants to add more gains before this week finally closes its doors. With the gains, that is as far as the good news goes as another big issue is at hand. That issue is the bull trap looming as bulls cannot eke out that weekly gain above the 55-day Simple Moving Average (SMA) at $1,600.
ETH price is thus at risk of being run down into the ground on the back of that bull trap. If the bull trap falls in line with a negative trading week in overall markets next week, added with more dollar strength, expect the floor at $1,404 not to hold and break down. Plenty of free room opens up until the first support becomes available at $1,011, the low of July.
ETH/USD Weekly chart
Although that bull trap could be there, it can easily be dismantled should global markets positively start the new trading week. Look for equities storming out of the gates with multiple gains across the board and in several trading sessions from Asia to the US. Bulls would quickly jump above that $1,600 level and eke out further gains by Friday towards roughly $1,928 and be back at the high of August.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.