despite ethereum merge Expected to reduce emissions by up to 88% and potentially create ETH deflation, the price dropped significantly in August.
Ethereum has been falling below a descending resistance line since reaching an all-time high of $4,868 in November 2021. The downside move has so far led to a June 2022 low of $880 locally. The low also coincides with a new all-time low in the weekly RSI (green circle).
The price reversed shortly after, causing the RSI to break out of its oversold zone.
The relief rally ended with a local high of $2,031 on August 14, 2022 (red sign) and ETH has been declining since then. The top validated the $1,920 area as resistance (red icon).
fall from resistance
The readings of the daily chart support the validity of the rejection from the weekly chart. This is because the RSI broke an ascending support line after the price hit the August 14 high.
If the downside momentum continues, there is a confluence of support levels between $1,250 and $1,330. This support is made by:
- 0.618 Fibonacci Retracement Support Level (White)
- a horizontal support area
- A possible ascending support line (dashed)
The line has not yet been validated enough times, so its exact slope remains uncertain.
future eth trajectory
The most likely wave count shows that Ethereum has completed a five-wave upward move since its June lows.
If so, it is probably forming an ABC corrective structure and is close to the bottom of wave A.
The six hourly RSI has started generating a bullish divergence (green line). If the divergence materializes, it could lead to a breakout from the short-term descending resistance line and initiate the onset of wave B.
If true, the count would suggest that ETH would reach higher levels between $1,730 and $1,800 before a full lower C.
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