ETH Price Analysis: RSI Divergence May Revert Ether From $1730
The Ethereum (ETH) price recovery has stalled at $1730 resistance and formed a minor consolidation with $1600 support. In addition, a bearish divergence in momentum indicator(RSI) indicates the bears are wresting control from buyers, which may encourage the $1600 support breakdown. Thus, should you keep holding those Ethers?
Key points:
- The ETH price aims for another 10% jump under the influence of the rounding bottom pattern
- The daily candlestick closing below $1600 would invalidate the bullish thesis
- The intraday trading volume in Ethereum is $10.74 Billion, indicating a 24.5% loss
Source- Tradingview
The $1000 psychological support cushioned the prior downtrend and reverted the ETH/USDT pair to a rounding bottom pattern. In response to this bullish reversal pattern, the altcoin has rallied 67.8% within a month and hit the $1730 supply zone.
Today, the ETH price currently trades at the $1700 mark and is nearing the $1730 breakout. If the buying pressure sustains, this will be a second retest to the overhead resistance within a fortnight.
A bullish breakout from this resistance would signal the continuation of the prevailing recovery. The resulting rally should drive the ETH price 10% higher to the $1900 mark.
However, the long-rejection candles observed at this resistance last weekend and the presence of 100-day EMA at the same level form a formidable barrier. Therefore, the buyers need strong bullish momentum to surpass this $1730 mark.
Thus, if buyers failed to do so, a possible reversal and breakdown below the 20-day EMA would signal a significant correction in Ethereum (ETH) price.
Technical indicator-
RSI: The daily RSI slope dropped lower concerning the last swing high in price action. Thus, this bearish divergence indicates weakness in buyers’ commitment and bolsters the correction theory.
EMAs: the ETH price wobbling between the 20-and-100-day EMA creates a narrow range. A breakout from either of these EMAs will give a better confirmation for respective rallies.
- Resistance level- $1730, and $1900
- Support levels- $1600 and $1400
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