Ethereum (ETH) is slightly up since recovering from the $2,350 support on Jan. 24 but has yet to confirm a trend reversal to the upside.

day view

Ethereum has been falling since hitting an all-time high of $4,868 on November 10th. The decline accelerated after the price broke below the ascending support line, confirming it as resistance (red icon) shortly after.

The move down led to a local low of $2,159 on Jan. 24. The scan of the low and subsequent bounce confirmed the $2,350 area as support.

ETH has surged since retesting support (green icon) and is up 27% so far.

ETH/USDT daily chart | Source: TradingView

Signals from indicators

Technical indicators on the daily chart are giving bullish signals. This is particularly evident in the daily RSI, which has peaked at 43 after a brief dip below 30.

The RSI is a momentum indicator and levels below 30 are considered oversold. Most recently, the RSI fell below this level and recovered to the March 2020 low (red circle).

If the uptrend continues, the next resistance will be found at $3,200. This is the 0.382 Fibonacci retracement support.

ETH/USDT daily chart | Source: TradingView

The six-hour chart shows ETH moving along an ascending support line and it broke the horizontal resistance area of ​​$2,615.

However, the price was rejected by the 0.5 Fib retracement resistance at $2,785 and created a long wick (red symbol) above it. This is considered a sign of selling pressure.

If ETH breaches the ascending support line and the horizontal support area, it will indicate that a bottom has not been created yet.

ETH/USDT 6 hour chart | Source: TradingView

count waves

Trader @Tradinghubb tweeted an ETH chart and said that further downside is likely to cap the whole correction.

The source: Twitter

The move since the May 2021 high appears to have taken the form of an ABC correction. In it, waves A and C have an exact 1:1 ratio, which is often seen in such corrections. Additionally, all movement has been contained within an ascending parallel channel, supporting the possibility that a bottom has been created.

ETH/USDT daily chart | Source: TradingView

However, the short-term wave count shows that ETH has yet to complete a 5-wave backward momentum, which supports the possibility of the price eventually making another bottom.

But even in this case, ETH can still rally towards $3,150 before falling again.

ETH/USDT 12 hour chart | Source: TradingView

Finally, looking at the two-hour chart shows that the upward movement from the January 24th low was a three-wave structure.

This supports the possibility that ETH has yet to bottom and will fall again after reaching the resistance level outlined above.

ETH/USDT 2 hour chart | Source: TradingView

You can see the ETH price here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

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