Ethereum Price Prediction: A dangerous knife to catch

Ethereum price could recover a decent amount of losses in the days to come.

Ethereum price is a traders’ chart

Ethereum price decline is enticing investors to jump into the market for an early buy. Since September 10, the decentralized smart contract token has lost 25% of its market value. The decline serves as a chink in the armor for fundamentalists as the Ethereum Merge was thought to produce profitable returns upon its immediate installation. 

Nonetheless, the technicals have painted a different scenario in the short term, although there is a possibility for a profitable counter-trend play in the works.

Ethereum price currently auctions at $1,346. The bears have produced a steep decline that unfolds into five waves on intra-hour time frames. Currently, the ETH price has fallen shy of retracing into the 200-week moving average by two dollars. The current swing low is $1,280, and the indicator is positioned at $1,278. The breach of the moving average will likely bring an influx of high-cap investors into the market with automatic entries at the barrier.

Still, the most interesting part of the 25% decline is the Volume Profile indicator. Despite the steep descending trend, the volume profile is relatively sparse. This could be a cue that retail traders are at work, enjoying the bearish momentum but could be due for a sharp pullback if market conditions persist. 

A rally back into the recently breached 8-day exponential and 21-day simple moving averages would give a 16% increase in profit from the current market value. If the bulls can find support  at this level, an additional 20% rise could occur to $1,850, sweeping out retail traders' liquidity above the September swing high at $1,761.

Invalidation of the early knife catch scenario – with targets at $1,700, $1,750 and $1,850 – could be a break of the July 13 swing low at $1,006. If the bears can breach this level, consider the entire uptrend thesis void.

In the following video, our analysts deep dive into the price action of Ethereum, analyzing key levels of interest in the market. -FXStreet Team