- Ethereum price attempted to form a higher high above the July 26 swing high at $2,433 but failed.
- This failure reveals that ETH was overbought and due for a retracement down to $2,174 or $2,018.
- While a pullback seems likely, market participants should note that a breakdown of $2,018 will invalidate the bullish thesis.
Ethereum price is experiencing a lack of bullish momentum after trying to scale new highs without a pullback.
Therefore, the exhaustion of the buying pressure could lead to a minor retracement that maintains the bullish outlook.
Ethereum price falls short
Ethereum price rose roughly 42% from July 20 to July 26 to set up a higher high at $2,433 as it followed in the flagship cryptocurrency’s footsteps. As BTC created a second higher high on July 28, the ETH bulls gave it a shot but failed, indicating that the buyers are weak.
Instead, Ethereum price only created a lower high, revealing that a pullback is likely.
Considering how BTC is also due for a retracement, the correlation reveals that ETH will promptly follow suit.
The first level target for the bulls is $2,271. However, a breach of the said level might lead to the formation of a double bottom at the $2,018 support or the higher low above it. Either way, this development is bullish for Ethereum price.
Assuming the best-case scenario, Ethereum price will retrace to $2,174. Here or $2,018 are two places where investors can expect a reversal in the trend to bullish.
The $2,460 and $2,640 are two crucial levels market participants need to watch out for in addition to $2,897.
ETH/USDT 4-hour chart
While things are working out for Ethereum price, things could go awry quickly if the bearish momentum increases to a point where it forms a lower low below the July 27 swing low at $2,172,.
A move below this or a lower low will notify a shift in trend.However, if ETH breaks the $2,018 demand barrier, it will invalidate the bullish thesis and open the possibility of a move to $1,850.
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