Disclaimer: The results of the following analysis are the sole opinions of the author and should not be construed as investment advice
The level above $ 3,300 has been held in response to Ethereum’s steady upward trend. A failed breakout attempt appeared to result in a fourth straight red candle on the Ethereum chart at press time. That was something that was last seen over a month ago. A few other risks existed in the form of an ascending channel breakdown and sell signals on some ETH indicators.
At the time of writing, ETH was trading at $ 3,121, down 6% over the past 24 hours.
Ethereum 12 hour chart
While ETH has held its position in a steady upward trend since the end of July, the 12-hour chart showed some weaknesses. ETH has been trading within an upward channel since early August, but the lower range of $ 3,400 to $ 3,600 has yet to be cracked. The spotlight is now falling back on the lower trendline and the 50-SMA (yellow), both of which have the potential to deny a longer decline.
Unless selling pressures are kept above $ 2,900, another collapse would be in place. This would invite additional short sellers. The cut-off for medium-term bullish control would be around $ 2,700, above which the 200 SMA (green) would be in focus.
The RSI made lower highs and identified bearish divergences in relation to ETH price action. This was an important warning sign that offered the chance of a major decline. Moving below 45-40 and into a bearish area would confirm an unfavorable result for ETH.
Lower peaks were also seen on the Awesome Oscillator – a finding suggesting that bullish momentum had worn out. This put a lot of pressure on the Directional Movement Index. The indicator struggled to spot a clear market trend as the + DI line was intertwined with the -DI line.
Another 10% decline seemed possible for ETH if buyers didn’t respond immediately to selling pressure. To reverse a bearish projection, ETH needs to stay above the 50 SMA and avoid a closing price below $ 2,900.
If the market turns unfavorable, it is likely that ETH would dip as low as $ 2,700 before buyers offered to make a comeback. Meanwhile, the market is more risky for bullish traders and ETH short selling in the event the Alt closes below a critical price level would be a better call.