This Daily Chart Pattern Puts Ethereum Price At An 8% Downside Risk

The increased selling pressure in the crypto market could be associated with the recent release of the Personal Consumption Expenditures (PCE) index. The crypto market reacted negatively to its higher-than-expected value and triggered a correction phase in the majority of the major coins. Thus, the Ethereum price, with no exception, turned down from $1720 and initiated a new bear cycle within the megaphone. Here’s how this pattern may further influence the ETH’s future price.

Key Points:

• A megaphone formation hints at increased volatility and uncertainty as it is formed by two diverging trendlines and a series of higher highs and lower lows.
• The ongoing bear cycle with the megaphone put could plunge the Ether price to a lower support trendline indicating a potential 8-9% downfall.
• The intraday trading volume in Ether is $8.28 billion, indicating a 7.5% gain.

Source- Tradingview

The Ethereum coin daily time frame chart displays a brief phase of consolidation in the past few weeks, despite a series of higher high formations. It is because, overall, the price action is attempting to form a megaphone pattern in the daily chart due to the 10% dip to the $1500 level. 

Currently, the price trend shows a correction phase that will possibly reach the $1500 mark before showing any signal of recovery. In case the correction continues below $1500, it will test the declining trendline of the megaphone pattern. Hence, short-term buyers can find entry spots at these two levels. 

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At press time, the ETH market price is at $1600 with an intraday fall of 0.43% and minimum price movement. Traders can expect an increase in volume by the end of the day resulting in a rapid movement leading the price closer to the support level of $1500.

However, if the ETH price sustains above the support trendline, the coin holders may witness a prolonged consolidation.

Technical Indicator

RSI:  The daily RSI slope is declining with the correction phase, but the diverging rate increases the possibility of a bullish divergence as it reaches $1500 support. In such a case, traders can find a double bottom pattern with the support of RSI divergence, giving a high probability of a bull run in March 2023. 

EMAs:  The daily 200 and 50-day EMAs are giving a golden crossover, but the growing uncertainty reflected by the technical pattern warns investors to wait till the correction phase bottoms out.

Ethereum Coin Price Intraday Levels-

• Spot rate: $1600
• Trend: slightly bearish
• Volatility: High
• Resistance level- $1680 and $1788
• Support level- $1500 and $1420