Disclaimer: The conclusions of the following analysis are the sole opinion of the author and should not be considered investment advice
Ethereum [ETH] The inability to break out of the chains of its daily 20 EMA (red) for two months left its investors quite dissatisfied. The waves of the recent bitcoin rally helped ETH to test the 23.6% Fibonacci level on a falling wedge breakout.
A sustained pullback below the control point (POC, red) will hinder near term bullish attempts.
Not losing the POC level could put ETH in an extended squeeze ahead of a trend-changing move. At press time, Alt was trading at $1,969.3, up 4.32% over the past 24 hours.
ETH daily chart
Trading against the current trend may not be a profitable decision without a substantial jump in buying volume. Taking into account the current market dynamics, rejection at the 23.6% level could propel ETH into an extended tight phase near the POC area.
However, a solid close below the POC would see the coin drop 5-7%. Thereafter, buyers will likely instigate a bounce-back from the $1,790 level.
Despite the recent breakout, Supertrend has refrained from changing its stance as it was in the red zone since April 11.
On the other hand, historically, the coin has displayed an inclination to buy back after the gap between the 20 EMA (red) and the 50 EMA (cyan) exceeded 13%. A gradual upswing from the PoC area will help bring the Alt Test to 38.2% level in the coming days.
argument
The RSI has marked a decent recovery in the last four days but is yet to cross the midline and claims a bullish lead. Similarly, the CMF’s bullish trend was observed to be bearish near the zero-mark.
Over the past few weeks, OBV has seen lower troughs and peaks along with price action. Thus, confirming the strength of the current direction.
Lastly, all these indicators have seen a bearish divergence with the price last week indicating a possible near-term shock.
conclusion
Bulls need to step in to increase buying volume in the POC area to prevent a 5-7% downside risk.
An entry gate would open for a near-term shock below the $156 mark. A final recovery above the 20 EMA should act as an entry trigger for the bulls. In this case, take-profit levels will be near the $2,180-zone.
Lastly, investors/traders need to keep an eye on the movement of bitcoins. Especially since ETH shares a 96% 30-day correlation with King Coin.