On August 17th, the Ethereum coin gave a high momentum breakout from the support trendline of the rising channel pattern. Losing support which carried an uptrend for the past nine months reflects the second-largest cryptocurrency is poised for a prolonged correction. The falling price found bullish support at $1576 and reverted 5% higher. Can this upswing kickstart a new rally?
Ethereum Daily Chart: Key Points
- The formation of the inverted pennant pattern indicates the price trend is witnessing minor consolidation before the next downfall.
- A breakdown below the support trendline of the pennant pattern will set the ETH price for a 12% drop
- The intraday trading volume in Ether is $5.08 Billion, indicating a 24% gain.
Source- Tradingview
In response to the broader market sell-off, the Ethereum coin experienced an aggressive downfall in the third week of August, leading it to $1576. Such sharp drops are usually followed by a minor pullback to recuperate the bearish momentum if the prevailing trend remains intact.
However, for the past four days, the ETH price has been trading sideways indicating the selling momentum is still active denying the need for a pullback. This supply pressure could continue the downward trend in the near future.
A closure look in the 4-hour time frame chart shows the minor consolidation has shaped into an inverted pennant pattern. A bearish breakdown from the pattern’s support trendline will release build-up selling momentum and will likely push the price to the $1450 mark.
Can ETH Price Rise Back to $1800?
A bearish pennant pattern formation projects a high possibility for the Ethereum coin to continue the downward approach. However, a less likely yet possible breakout from the pattern’s resistance trendline will signal a potential pullback to retest the breached trendline of the channel pattern near $1800. The price sustainability below this trendline or breakout above it will determine the future projection for ETH.
- Exponential Moving Average: A bearish crossover between the 50-and-100-day EMAs offers an additional edge to market sellers.
- Average Directional Index: The daily ADX slope uptick at 34% reflects the sellers must have enough steam to plunge the altcoin lower.