Ethereum price tests January 2022 breakout and finds support, ETH to retest $3,200
|- Ethereum price is now at its most vulnerable position since December 28, 2021.
- One final Ichimoku level preventing a total collapse of ETH must hold.
- Key resistance ahead must be broken to prevent a sell-off.
Ethereum price action has not been immune to the broader effects weighing on risk-on markets. Fears of an imminent invasion of Ukraine by Russia have sidelined many market participants or have scared off investors entirely. However, a new bull market and expansion move may be developing for ETH.
Ethereum price develops highly probable bear trap before returning to $3,200
Ethereum price action on its daily Ichimoku chart is, at first glance, ugly. ETH is below the Ichimoku Cloud, the Tenkan-Sen, and the Kijun-Sen. From an Ichimoku perspective, ETH is at the weakest and most bearish position since the Ideal Bearish Ichimoku Breakout was triggered on December 28, 2021.
The only Ichimoku indicator preventing a total collapse of Ethereum price is the Chikou Span, which is currently above the bodies of the candlesticks. If sellers push ETH to a close at or below $2,400, bears could probably push price to $2,000 or lower.
However, despite the near-term bearish outlook, Ethereum price completed a very standard and normal behavior: a retest of a breakout from a consolidation zone. The congestion zone between $2,300 and $2,600 (61.8% Fibonacci retracement) that existed between January 22, 2022, and January 31, 2022, was broken on February 1, 2022.
ETH/USD Daily Ichimoku Kinko Hyo Chart
Sellers retested the former resistance level turned support at $2,600, but buyers stepped in and prevented further losses – for now. However, Ethereum price must return to at least the 50% Fibonacci retracement at $2,900 to prevent further bearish price action and position Ethereum for another run towards the $4,000 value area.
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.