Ethereum’s native token Ether (ETH) looks ready to continue its ongoing rebound move toward $4,000, according to a technical setup shared by independent market analyst Wolf.
Classic bullish reversal pattern in the works?
The pseudonymous chart analyst discussed the role of at least three support levels in pushing the ETH price up by nearly 30% from its local bottom of $2,160. These price floors included a 21-month exponential moving average (EMA), the 0.786 Fib level of a Fibonacci retracement graph drawn from $1,716-swing low to $4,772-swing high and the lower boundary of an ascending triangle pattern.
Wolf noted that the triple-support scenario could push Ether price to $3,330. In doing so, the confluence would activate a classic bullish reversal setup, dubbed inverse head-and-shoulders (IH&S).
In detail, the IH&S pattern could have Ether form three consecutive troughs, with the middle trough (the head) deeper than the other two (the left and right shoulders). Meanwhile, all the troughs will hang upside down below a common resistance trendline, called the neckline.
In a “perfect” scenario, a break above the IH&S neckline may push the Ether price to as high as the maximum distance between the neckline and the head. That puts the ETH price en route to $4,000.
But if ETH gets rejected in the run-up to $3,000, it would mean a pullback toward the ascending triangle support.
ETH bulls ain’t out of the woods
As Cointelegraph covered earlier this week, Ether’s ongoing price rebound comes as a part of a broader correction that started after ETH reached its record high above $4,850 in November 2021. In doing so, the Ethereum token fell by as much as 55.65% to $2,159 before bouncing upward by 30% to reach its current price levels.
The retracement could come out as a temporary respite in Ether’s general downtrend. As a result, its price could still fall lower, according to a “bear flag” setup shown in the attached chart below, with a downside target near $2,000.
Several on-chain indicators agree with the bearish outlook. For instance, Glassnode data shows that the Ethereum balance on all exchanges has been rising since early December 2021, coinciding with the ETH’s price declines.
A rising number of ETH held by exchanges raises the likelihood of traders selling them for other assets. Notably, a yearlong decline in the number of ETH in exchanges’ reserves had coincided with the Ether price rallying from $730 to over $4,800.
Ethereum whales vs. fishes
More downside cues for the Ethereum token come from a clear absence of influential buyers in the market. For instance, some of Glassnode’s metrics show that the number of Ether wallets that hold more than 100 ETH and less than 1,000…
Read More: cointelegraph.com