Ethereum must close the week above $3,300 or ETH will resume selling
|- Ethereum price action continues to respond strongly from recent lows.
- Price action could develop a nasty bull trap despite a massive bounce from key support structure.
- Bulls must defend recent gains or face renewed selling pressure.
Ethereum price has undoubtedly made some wild swings this week. Dropping below the $3,000 zone caused some jitter among market participants, but so far, buyers have been very supportive and responsive – but that conviction will need to be maintained.
Ethereum price is at risk of retesting $2,500 if bulls fail to hold above critical support
Ethereum price, yet again, is up against a make-or-break price level. The $3,300 price level is the single most crucial price level to watch. The Volume Point of Control, 38.2% Fibonacci retracement, and the weekly Kijun-Sen share the $3,300 value area. A close above $3,300 is bullish, while a close below is bearish.
If bears can close Ethereum price below the $3,300 level on the weekly chart, then an influx of new short-sellers and weak-handed buyers turned sellers will likely enter and push Ethereum lower. In essence, a very nasty bull trap will have been triggered, which could see Etheruem returning to the $2,500 value area.
ETH/USDT Daily Ichimoku Kinko Hyo chart
However, all participants should remember the current condition of the Composite Index on the weekly chart. It hit lows not seen since September 2019 and created extremely powerful hidden bullish divergence. The combination of the historical Composite Index lows and the hidden bull divergence indicate Ethereum still has much room to run higher.
If bulls close Ethereum price at or above $3,300, the next test is the weekly Tenkan-Sen at $3,900.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.