Volume Action Hints Ethereum Price May Fall Below $1200 Mark

The Ethereum price action is gradually narrowing with two converging trendlines. However, this consolidation phase is part of a bearish pattern called an inverted pennant. In theory, this consolidation offers a short break period to replenish the bearish momentum. Will the Ethereum price break the $1200 support?

Key points:

• Higher volume during bearish days suggests the Ethereum price is bound for a prolonged downfall
• The Ethereum price trading below the crucial EMAs(20, 50, 100, and 200) indicator multiple hurdles for bullish recovery.
• The intraday trading volume in Ethereum is $5.4 Billion, indicating a loss of 3.7%.

Source- Digitalcoinprice

A higher number of daily red candles during the consolidation phase indicates the selling activity receives more involvement. Moreover, the Ethereum chart shows a high volume spike during those red candles, accentuating that market participants are interested in lower prices.

Amid the ongoing selling in the crypto market, the Ethereum price turned down from the overhead trendline and plunged 2.75% in the last two days. The altcoin currently trades at $1297 and is already in reach with a support trendline. 

Thus, the narrow price spread between the trendline can be validated as a no-trading zone. Therefore, the interesting trades must wait for the price to break either trendline to escape this long conditional.

Furthermore, with the likelihood of the price breaking the lower support trendline, the Ethereum price could drop 4.5% to hit the $1240 support. In addition, a breakdown below this support will further extend the downward spiral.

On a contrary note, a bullish breakout from the triangle consolidation is possible. This breakout could undermine the bearish thesis and hints at a new recovery rally.

Technical indicator-

Bollinger band: the indicator’s upper and lower shrunk narrow accentuates a no-trading zone in Ethereum. 

Relative strength index: though the price action supports the bearish theory and resumption of the prevailing downtrend, the rising RSI slope indicates the buyers are wrestling for trend control. Thus, this bullish divergence strengthens the possibility of a resistance trendline breakout.

Ethereum intraday price levels

• Spot price: $1298
• Trend: Sideways
• Volatility: High
• Resistance level- $1400 and $1550
• Support level- $1200 and $1000