Ethereum [ETH] Price Analysis: Price Just Broke Down After Forming a Double Top, Where Will It Find Support?


Ethereum [ETH] Price Analysis: Price Just Broke Down After Forming a Double Top, Where Will It Find Support?

Price broke down after reaching the resistance area at $160-$175 and forming a double top. The breakdown was preceded by short-term bearish divergence and is currently trading in the minor support area near $135. There is no noticeable short-term trading structure.

Important points

  • The major resistance area is found at $160-$175.
  • The major support area is found at $80-85.
  • There are minor support areas for $135 and $125.
  • Price is trading above the daily Ichimoku cloud and short/medium-term moving averages.
  • There is a short-term bearish divergence in the RSI.

Ethereum [ETH] Price Analysis – ETH/USD Daily Chart

ethereum price
Chart Source: Tradingview, Bitfinex

A look at the Daily chart for Ethereum shows that price is currently trading at $140, right above the 0.382 fib area of the upward move from $82 to $163. The entire move, which ended with a double top on February 24th occurred over 69 days. Yesterday’s daily candle was a bearish engulfing which transpired on very significant volume. Currently, there is no clear trading structure in place, however, it is possible that price is following an ascending support line which coincides with the 0.618 fib line of the entire movement. However, the support line has only been validated twice. The line could be a precursor to an ascending triangle in the future, with the $165 area acting as the top resistance line of the triangle. The RSI was in overbought territory for a short period but is now at 52, indicating neither overbought nor oversold conditions. After a two week period of gains, the MACD has lost its power and is very close to making a bearish cross.

As for the moving averages, the 21 and 50-period MA have made a bullish cross and price is trading right above them, possibly finding support on the 21-period MA. The 200-period MA offered resistance to the price in the $175 area. Price broke out through the positive portion of the Ichimoku cloud on February 18 and is now trading above it.

Ethereum Cahrt
4-hours Chart Source: Tradingview, Bitfinex

A look at the 4-hour chart shows that the breakdown was preceded by bearish divergence in the RSI. In one 2-hour candle, the price dropped from $167 to $140, a drop of 16%. Price is currently trading in the minor support area at $135, formed by previous lows. The next support area is found near $135, which also corresponds with the 0.5 fib line of the entire movement, as visible on the daily chart.  There is no clear trading structure in the short-term.

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Ethereum [ETH] Price Analysis: Price Just Broke Down After Forming a Double Top, Where Will It Find Support?
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Ethereum [ETH] Price Analysis: Price Just Broke Down After Forming a Double Top, Where Will It Find Support?
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Price broke down after reaching the resistance area at $160-$175 and forming a double top. The breakdown was preceded by short-term bearish divergence and is currently trading in the minor support area near $135. There is no noticeable short-term trading structure.
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Disclaimer The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Author: Valdrin Tahiri

Valdrin is an eager trader, cryptocurrency enthusiast, and freelance writer. He specializes in technical analysis, indicators and charting guides. Reach out to him at [email protected]

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Valdrin Tahiri 35 Articles

Valdrin is an eager trader, cryptocurrency enthusiast, and freelance writer. He specializes in technical analysis, indicators and charting guides. Reach out to him at [email protected]