The ETH sell-off on November 16 increased the possibility of a drop below $ 4,000.
ETH fell 10% to around $ 4,100 on Tuesday, while Bitcoin saw a market correction. The largest altcoin fell below the support of the uptrend line in the fourth quarter.
Daily ETH / USD Price Chart | Source: TradingView
ETH also tested the 50-day exponential moving average (50-day EMA, red wave in the graph above) as new bottom before moving to the top. The next support to watch if the 50-day EMA breaks is around $ 3,700.
Many rejections before us?
A rising trendline is part of a rising wedge – a technical pattern that many analysts view as a bearish reversal signal. It occurs when the price fluctuates in an area defined by two converging upward trend lines.
ETH / USD daily price chart and rising wedge structure | Source: TradingView
Meanwhile, analysts confirm a wedge breakout if the price falls below the lower trendline and is accompanied by increased volume. They usually predict a drop by the greatest distance between the wedge’s trendlines.
Hence, ETH is likely to drop below $ 3,000 based on a rising wedge setup. Still not entirely hopeless.
Test again Resistance of the ascending triangle as support
The ascending triangle, which ETH forecasts at around $ 6,500 by the end of 2021, compensates for the bearish reversal setup caused by the rising wedge structure.
The bullish setup appeared when ETH retested the triangle’s resistance as support in the days following a breakout above it. Such a move usually removes the “weak hand” from the market and creates an opportunity for traders / investors with a long-term bullish outlook based on the asset’s strong fundamentals.
ETH / USD price chart 3 Day and establish Tascending triangle | Source: TradingView
As a result, the recent ETH pullback is likely to dry up once price hits the triangle’s resistance below USD 4,000 – which is also the lower trendline of the rising wedge. If it recovers after that, the price can climb to $ 6,500.
You can see the ETH price Here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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According to Cointelegraph