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Disclaimer: The results of the following article are the sole opinion of the writer and should not be taken as investment advice
In a previous article, the time of Ethereum closing or breaking was explained when the price of the cryptocurrency almost came out of the massive bearish pattern. A lot has changed for Ethereum since then and this article will focus on what we can expect next.
Ethereum 1-day chart
Source: ETHUSD on TradingView
Ethereum’s price was around 7-10% far from hitting its local high of $ 488 at press time. The local top was last seen on September 1st and the price was taking another hit in the same way. At press time, ETH was priced at $ 456 and has been showing signs of recovery from the market bulls, but they won’t last long.
The setup, like last time, is still bearish and for similar reasons.
Rationale
The rising wedge pattern itself is a bearish pattern. This is not all because it is also important to consider the indicators. The RSI was at the top of the charts, with the same observed around the 70 level [overbought].
What is interesting here is the OBV indicator [on-balance volume]. The price formed higher lows while the volume indicator did the opposite – it rose despite falling cryptocurrency prices. This was a hidden bearish divergence and suggested that the price will fall soon.
Ergo, the question is: to what extent?
Conclusion
As for the levels, on a macro scale, the 0.236-Fibonacci level [$395.48] it seemed to be a good resting point for ETH, at least in the short term. Subsequent levels of 0.382 [$337.12] and 0.5 [$289.35] they are also good levels for the price to find support.
Other levels include the 20-day moving average [yellow] and the 50-day moving average [purple]. The 20-day moving average is the immediate support at $ 408, just above the 0.236 level.
There are two possibilities: the price will coincide with the bearish divergence and go down, or go up higher. For now, all evidence points to a brief retreat. Hence, we can expect Ethereum to drop further down the rankings.
