Ethereum to dive to $3,800 as ETH bulls fail to break above key resistance confluence
|
- Ethereum price cannot break above the Cloud and return inside the bear flag.
- Bearish Engulfing candlestick pattern developing on the daily chart.
- Oscillators point to more selling pressure.
Ethereum price has faced considerable bearishness during Thursday’s trading session. The daily candlestick has been one that represents persistent, consistent, and constant selling pressure with nary a hint of any reprieve.
Ethereum price smacked by bears as bulls get led to the slaughter
Ethereum price action has spent the past four consecutive trading days pushing against two primary resistance zones: the bottom channel of a former bear flag and the top of the Cloud (Senkou Span A).
Near-term support for Ethereum is currently the confluence zone of the Tenkan-Sen, Kijun-Sen, and dominant interior trendline (black diagonal line) at the $4,100 value area. However, the nature of this daily candlestick should not be overlooked – it is the definition of a powerful bearish warning.w
A Bearish Engulfing candlestick pattern is a single candlestick that ‘engulfs’ the entire range of the candlestick preceding it. What makes Ethereum’s current Bearish Engulfing candlestick so powerful is that it engulfs the bodies of the last five candlesticks.
The following primary support zone that Ethereum will test is the bottom of the Cloud, Senkou Span B, at $3,800. Senkou Span B is the most powerful level of support/resistance within the Ichimoku Kinko Hyo system. Failure to keep a daily close above Senkou Span B would likely trigger a massive push south.
To invalidate this near-term bearish projection, buyers need to rally Ethereum above the Cloud and into a close where the Chikou Span is trading in open space. A close at or above $4,650 would fulfill both of those requirements.
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.