Ethereum’s native token Ether (ETH) threatens to drop below $ 3,200 in the upcoming sessions as its rally encounters tough resistance area.
Specifically, the ETH price has risen by almost 22% in the previous monthly time frame after a market-wide bull run. This propelled the second largest cryptocurrency by market cap from under $ 3,000 to over $ 3,650 in the first eight days of October, leading to more bullish projections.
“$ 6,000 is going to happen quickly; $ 10,000 programmed ” Note Technical chartist Crypto Cactus based on Twitter. David Gokhshtein, CEO of the PAC Protocol distributed data network, also predicts an upward target of $ 10,000 for Ether.
Wait $ ETH Pass away $ 10,000 so the party can actually begin.
Side note: the only thing I think about is how will it be? #NFT Market reaction?
– David Gokhshtein (@davidgokhshtein) October 8, 2021
However, ETH price is likely to dive into a combination of three notable bearish indicators that could limit upside moves and could contribute in part to recent price gains.
Two resistance zones and rising wedge
The three bearish indicators that can move Ether into a bearish reversal are the rising wedge, the descending trendline resistance, and the temporary resistance bar, as shown in the graph below.
The rising wedge occurs when ETH recovers, leaving a series of higher and lower highs. Meanwhile, the cryptocurrency uptrend is emerging against the falling volume, showing traders’ lack of confidence in the upside move.
Additionally, the top of the structure – the point where its two trendlines converge – is around two historical areas of resistance. The first bar is a temporary resistance bar that, as shown in the graph above, previously indicated the spike in ETH above $ 3,650.
At the same time, the second resistance is the descending trendline, which is more visible on the lower daily chart at around USD 3,800.
Therefore, the top of the rising wedge and two resistance trend lines represent a downside risk for Ether. In this case, the Ethereum token collapses to the maximum height between the upper and lower trend lines of Wedge.
Related: 3 factors that could cause Ethereum price to rise 100% in the fourth quarter
With that, it’s on its way below $ 3,200 and will act as an accumulation zone for Ethereum traders in the first half of September 2021.
Inverse head and shoulder trigger?
A drop to or below $ 3,200 doesn’t necessarily drive ether into a full-blown bearish cycle. Conversely, it could trigger a bullish inverse head-and-shoulder setup.
If setup goes as intended, the accumulation of ETH tokens among traders should soar to near $ 3,200, triggering a jump towards the neck area in the graph above. In doing so, the ETH price targets its inverse head and shoulders to a length that corresponds to the maximum distance between the neckline and the lower edge of the pattern.
That would put Ether on its way to a new all-time high of around $ 4,500.