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Ethereum (ETH) had recently dropped below an ascending wedge formation, as shown in blue on the following chart, and since then lost its short-term bullish momentum. ETH is now facing crucial support level as described below.
Key Support levels: $4,354, $4K
Key Resistance levels: $4,689; $5,075
Over the past week, amid a new ATH for ETH, the bulls were unable to push the coin above the coveted $5,000 mark. The current ATH lies at $4,878 (recorded on Wednesday). Since then, the price is trading sideways and appears to consolidate just above the support at $4,354. The bullish case is that ETH will retest this support before being able to resume its multi-month uptrend.
This loss of momentum is not very concerning so long ETH does not drop below the key support and can be interpreted as a healthy break in the uptrend.
The Technicals
Trading Volume: Decreasing volume on this pullback. This shows the bears have no conviction to push ETH price lower as of now.
RSI: The RSI is decreasing and there is a lot of room to go lower, considering it was hovering around 70 points not too long ago. For this reason, it is less likely ETH will reverse course in the near future.
MACD: The MACD histogram on the daily timeframe went through a bearish cross. This is not bullish news; however, the drop so far was followed by a low volume and without much conviction. If the critical support holds, then ETH can quickly recover and return towards ATH levels. It’s advisable to wait for Monday’s price action.
Bias
The short-term bias for ETH is bearish as there is a high chance ETH will retest the key support level of $4.3K. If that level holds then ETH can return on the uptrend and flip the bias back to bullish. In the mid and long term, ETH is still on the bullish track.
Short-Term Price Prediction for ETH
Ethereum lost momentum over the weekend by breaking below the ascending wedge. This indicates that ETH is likely to go back to the support level at $4,354 in the near future.
As mentioned above, ETH mustn’t drop below this support, otherwise, bears can be embolden and take ETH lower towards $4K.