Ethereum price bound to dive below $1,500 before the uptrend resumes
- Ethereum price action has taken on a bearish tone since March 10.
- The Relative Strength Index (RSI) did not confirm the recent upward price action.
- A double top is clear, but it may morph into a head-and-shoulders top.
Ethereum price confirmed a double top pattern before rebounding and shaping a hammer on the 12-hour chart below. The quick rebound raises the question of whether ETH is now shaping a head-and-shoulders top and is bound for further losses.
Ethereum price is visibly influenced by the bears
The RSI is around the 52 mark, indicating a balance between supply and demand. It also adds validity to the alternative bearish view that Ethereum price could now be shaping a head-and-shoulders top. A fall below the 50 levels will indicate that momentum is accelerating for a bearish impulse.
A renewal of downward pressure that takes ETH below the key support at $1,714 on a 12-hour closing basis will shape a right shoulder over the coming days before falling below the neckline around $1,695.
Immediate support is at the .382 retracement level ($1,661) followed by the .50 retracement level ($1,583). If selling accelerates Ethereum price may retest the February low at $1,293, forcing the bulls to rethink their forecasts for a rally to $10,000.
ETH/USD 12-hour chart
The line in the sand for the bearish forecast is a trade above $1,944. Both bearish alternatives would be negated and ETH price will easily test the all-time high at $2,041.42.
Author
Sheldon McIntyre, CMT
Independent Analyst
Sheldon has 24 years of investment experience holding various positions in companies based in the United States and Chile. His core competencies include BRIC and G-10 equity markets, swing and position trading and technical analysis.
