Bullish Hopes Resurface With This Reversal Pattern

The Ethereum(ETH) price dropped by 20% last week after facing resistance at the overhead resistance of $2000. However, the buyers regain the trend control at $1600 and prepare another bullish launchpad to drive the prices higher above the $2000 mark. So, should you consider turning bullish for Ethereum despite last week’s crash??

Key points From ETH Analysis: 

• The Falling trend polls at the $1600 mark after a 20% drop from the $2000 resistance level. 
• The underlying sentiments suggest a bullish reversal Re challenging the $2000 resistance. 
• The intraday trading volume in Ethereum is $18.29 Billion, indicating an insignificant rise of 0.10%. 

Source- ETH/USD chart by Tradingview

With a remarkable bullish recovery over the past few months, the ETH prices take a bearish turnaround from the overhead resistance of $2000. The market value has decreased by 20% over the last week resulting in a price drop to the $1600 horizontal level. 

However, the buyers cushion the falling prices at the said demand level resulting in multiple lower price rejection candles. Nonetheless, the price action displays the possibility of an evening star pattern farming with the overhead resistance of the 50-day EMA. 

The ETH price currently trades at $1604 and is planning to exceed the 50-day EMA gradually. If the buyers manage to reclaim the trend momentum, the price action may form a cup and handle pattern in the daily chart with the neckline at the $2000 mark.

This bullish pattern can quickly propel the market value to $2500 upon breakout, but currently, the market conditions display a weak possibility of a bullish turnaround. 

If the evening star pattern forming at the 50-day EMA increases the bearish trend momentum, a downtrend breaking below the $1500 mark can be seen.

Technical indicator-

DMI indicator: The DI lines display weakness in the bearish trend as the market price sustains near the $1600 mark. 

RSI: With the price action displaying a power struggle near the $1600 demand level, the RSI slope shows a positive recovery in the nearly oversold zone. Moreover, the 14-day SMA indicates a drastic fall in the underlying bullishness due to last week’s crash. 

• Resistance level- $1733, and $2000
• Support level- $1600 and $1426