Chart by TradingView
Key Support levels: $4,000, $3,700
Key Resistance levels: $4,435, $4,868 (ATH)
ETH formed a descending wedge as prices moved lower (in blue), hinting at a bullish potential. Initially, the cryptocurrency made a lower low which signaled that the correction could continue and sentiment in the market was very bearish.
However, almost as soon as the price hit the low $3,600, a quick reversal followed on strong volume, pushing ETH above $4,000, which was a key resistance.
This unexpected reversal surprised the market and optimism returned across the board as most altcoins recovered some of the previous losses. The question now is if ETH can sustain this recent increase in price.
Trading Volume: Significant volume on this most recent rally. This gives confidence that the move higher is a potential reversal in the downtrend for ETH.
RSI: The daily RSI is curving up and on the 4-hours timeframe, the RSI made a higher high which is a bullish signal. If ETH can sustain this most recent move and not lose the $4,000 support, then the RSI can continue moving up on higher timeframes as well.
MACD: The MACD on 12-hour has completed a bullish cross and on the daily timeframe, MACD is curving up fast. If the bullish momentum continues, then ETH has a good chance to reverse the downtrend.
The bias for ETH is bullish as long as the price stays above $4,000. Failure to remain there will quickly embolden bears to push ETH lower again.
The descending wedge, which is a bullish formation, was an early sign that ETH could rally. This was confirmed yesterday and ETH surprised the market with a quick dash above $4,000. So far, it managed to maintain this critical level, and the longer it stays above, the more bullish the market will turn.
