- Ethereum price is currently traversing a rising wedge pattern, which forecasts a minor pullback.
- A retracement to $2,106 is likely before ETH rallies 40% to tag $3,000.
- If the June 27 swing low at $1,804 is breached, the bullish outlook will face invalidation.
Ethereum price is trading inside a bearish pattern, a breakdown of which could push the altcoin down to a demand zone. Investors can expect ETH to rally around this area, and if the conditions are perfect, the range high will likely be retested.
Ethereum price prepares for liftoff
Ethereum price is currently testing the 50% Fibonacci retracement level at $2,360, trying to breach through it. However, since June 23, ETH set up three higher highs and three lower lows, which form a rising wedge when the swing points are connected using trend lines.
This pattern has a bearish bias and forecasts a 16% downswing if ETH slices through the lower trend line at $2,271. The target of $1,909 is obtained by measuring the distance between the first swing high and low and adding it to the breakout point at $2,271.
However, investors need to account for the demand zone that extends from $2,041 to $2,106 as this area of support might halt the sell-off from the rising wedge pattern and prematurely kick-start the uptrend.
Assuming this happens, Etheruem price is likely to rally 12% before it encounters the mid-point of the range at $2,360, the shattering of which will open up the path to the immediate supply barrier at $2,460 and $2,640.
In a highly bullish case, the buying pressure might be able to propel the smart contract token to the range high at $2,992 or the psychological level at $3,000.
While the pullback followed by a rally seems plausible, market participants should note that the rally might trigger without a correction. In which case, the upside targets remain unchanged.
ETH/USDT 4-hour chart
On the other hand, if the demand zone, stretching from $2,041 to $2,106, is shattered, the theoretical target described by the rising wedge at $1,909 might be tagged.
A breakdown of the June 27 swing low at $1,804 will set up a lower high and potentially invalidate the bullish thesis. Such a move might even trigger a sell-off to the range low at $1,729.
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