Jonathan Morgan
Independent Analyst
- Ethereum price continues to move higher during the Wednesday evening trade session.
- Significant upside potential exists of Ethereum can remain above $2,775.
- Downside risks remain a concern, and they are substantial.
Ethereum price responded bullishly to a somewhat hawkish interest rate increase from the Federal Reserve. Likewise, risk-on markets worldwide had a positive response, indicating that market participants felt the rate hike was already priced in.
Ethereum price must maintain its bullish momentum, or a massive bull trap could develop
Ethereum price action has been very volatile over the past several weeks. A series of major bearish continuation patterns were confirmed, but bears were unable to unwilling to push Ethereum lower. Instead, buyers and sellers were likely waiting for the Fed to announce their decision before making any moves.
After the Fed announced an expected 25 basis point rate hike, Ethereum responded positively. However, on the weekly Ichimoku chart, Ethereum price is currently testing the first resistance cluster at $2,775, consisting of the weekly Tenkan-Sen and the 2022 Volume Point Of Control.
Above the $2,775 resistance cluster is even stronger and more decisive resistance zone containing the 50% Fibonacci retracement and the top of the Ichimoku Cloud (Senkou Span A) at $2,900. So ultimately, if Ethereum price wants to establish a new uptrend, it will need to close above the weekly Ichimoku Cloud at or above $2,925.
ETH/USD Weekly Ichimoku Kinko Hyo Chart
If Ethereum price cannot close the weekly candlestick above $2,775, then a very probable bearish continuation move will likely occur. Therefore, the potential profit zone short-sellers would target is a return to the bottom of the Ichimoku Cloud (Senkou Span B) at $2,300.
Bulls have a difficult road ahead because to invalidate any near-term bearish outlook, the roadblocks ahead are many and difficult to break. As a result, significant volume and momentum will be required.
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