Ethereum Analysis Sandwiched Between Two Trend Reversal Patterns
Ethereum's (ETH) rally from the July 20 low is threatened by two reversal patterns that can cap gains in the second most valuable cryptocurrency. First, Ethereum broke below an upward sloping trendline that connects a series of lows. Secondly, the RSI momentum readings have turned negative (below the centerline 50) for the first time since the recent rally started.
Broken Trendline
The break below the upward sloping trendline is a bearish reversal signal. However, it remains to be seen if this is just a pause in the trend or a long-term trend reversal signal. The bears attempted to break below the strong psychological level of $3,000, but the move only lasted a short period of time.
The bears need a daily break to secure a reversal and close below the big round number $3,000. Below $3,000, the bears will not face any opposition as the next key support area only comes at around the $1,400 level.
RSI Momentum
The RSI oscillator also broke below the centerline 50, suggesting that the rally is losing steam. As long as the RSI oscillator remains below the 50 level, the bearish momentum should prevail.
However, if the bulls manage to defend the considerable round number of $3,000 and the RSI rise above the centerline 50, we can see another attempt from the bulls to push to new highs.
Broken Trendline
The break below the upward sloping trendline is a bearish reversal signal. However, it remains to be seen if this is just a pause in the trend or a long-term trend reversal signal. The bears attempted to break below the strong psychological level of $3,000, but the move only lasted a short period of time.
The bears need a daily break to secure a reversal and close below the big round number $3,000. Below $3,000, the bears will not face any opposition as the next key support area only comes at around the $1,400 level.
RSI Momentum
The RSI oscillator also broke below the centerline 50, suggesting that the rally is losing steam. As long as the RSI oscillator remains below the 50 level, the bearish momentum should prevail.
However, if the bulls manage to defend the considerable round number of $3,000 and the RSI rise above the centerline 50, we can see another attempt from the bulls to push to new highs.