- Ethereum price gets squeezed as it approaches the end of a rising wedge pattern.
- A breakout from the wedge’s lower trendline signals a 40% drop on the horizon.
- Transactional data suggests the support level at $1,690 could cushion this drop.
- A bounce from this support level could eventually lead to the development of a bullish scenario.
Ethereum price has dropped approximately 10% since it hit a new all-time high at $2,034 on February 20. At the time of writing, ETH price is trading just above the lower trendline of the rising wedge, waiting to establish a direction.
Ethereum price performance might come undone soon
Since mid-January, Ethereum price has been forming series of higher highs and higher lows. Connecting the swing highs and swing lows show converging prices which results in a rising wedge pattern.
This technical formation projects a bearish outlook and the target is determined by measuring the distance from the breakout point to the first pivot low.
In Ethereum’s case, it is a 43% drop from $1,840 to $1,040. This target coincides with the 38.2% Fibonacci level.
Therefore, a decisive 6-hour candlestick close below $1,840 would confirm the end of a rising wedge pattern and signal the start of a downtrend.
ETH/USDT 6-hour chart
However, IntoTheBlock’s Global In/Out of the Money (GIOMA) model shows the presence of stable support at $1,690. Here nearly 2 million addresses bought roughly 8.9 million ETH.
So, a breach of this demand barrier might seal the smart contracts platform’s fate and signal a drop to 38.2% Fibonacci retracement level at $1,040.
Ethereum GIOM chart
However, a bounce from the rising wedge’s lower trendline or even from the $1,690 support level could prevent this drop.
Additionally, if ETH closes above $1,965 on the six-hour chart, it would invalidate the bearish outlook due to the formation of a higher high. A spike in buying pressure here could allow ETH to retest the previous all-time high at $2,034
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high
Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines.
TON set to launch synthetic Bitcoin to boost its DeFi solutions
TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
USDT market cap crosses $120 billion as stablecoins continue their uptrend
The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.