ETHUSD seems to have stalled between $2,400 and $2,800 without any clear fundamental reason, but from a technical perspective, the explanation is quite straightforward. After breaking down from a massive triangle pattern, ETH bounced back as if nothing had happened. However, the rally has hit a wall right at the former trendline, what used to be solid support is now acting as resistance.This could be a sign that ETH’s upside momentum is running out. If the price breaks below $2,300, it would likely confirm that the downtrend is just getting started and could leave ETH in a much weaker position.
Although the double top already played out and hit the 61.8% target (which might have led some to think the worst was over) there’s still a possible move toward the full 100% target, which sits just above $1,000, near the bottom edge of the triangle.
Putting fundamentals aside, this setup makes me lean heavily bearish on ETH if it drops below $2,300. We are in front of a potential 50% decline in ETH, which is amazing specially if the risk that you are assuming is less than 5%.
On the other hand, if the price breaks above the previous trendline, it would open the door to a new, more bullish scenario with the price heading to 3.500$. Another way to play this, is by buying at 2.400$ area, and setting up a stop loss under 2.150$, the risk benefit is amazing again, so don't worry about the direction of ETH, be aware of the trading opportunities that is giving us in any direction!
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.