Ethereum Price Rebounds from Critical Support Level, Indicating Possible Consolidation Phase
After weeks of rejection and bearish developments, the price of Ethereum has reached a critical point near a pivotal support area. This support area includes the 61.8% Fibonacci retracement level, which is seen as a crucial zone for Ethereum bulls. Fortunately, the price has rebounded from this zone, providing hope amidst the prevailing bearish sentiment. This rebound also suggests the possibility of a temporary consolidation phase.
Ethereum’s price has been in a prolonged downtrend, breaking multiple support levels, including the crucial 100 and 200-day moving averages. As a result, Ethereum reached a multi-month low at $1,531. However, the price encountered a critical support zone between the 50% and 61.8% Fibonacci retracement levels. Market participants view this range as the final defense for Ethereum bulls. If the price drops below this threshold, it could increase the likelihood of a significant downward plunge.
In addition to these bearish signals, the 100-day moving average crossed below the 200-day moving average, forming a death cross event, which is a strong bearish signal. However, despite these indicators, there is still hope that the price could find support and enter a consolidation phase, moving around the 200-day and 100-day moving averages.
Analyzing the 4-hour timeframe, Ethereum’s price underwent a consolidation phase between the $1.6K-$1.8K price range. During this period, a bearish flag pattern formed, and eventually, the price broke below the lower trendline of the flag, triggering a significant downward movement. However, as Ethereum approached the critical support level at $1.5K, buying pressure intensified, leading to a rebound. This resulted in a retracement towards the lower threshold of the broken flag, potentially forming a pullback. The outcome of this pullback will determine whether Ethereum enters another downward phase or breaks above the trendline, indicating a surge towards the $1.7K resistance level.
The Taker Buy Sell Ratio metric, complemented by a 30-day simple moving average, alongside Ethereum’s price, provides insights into buyer and seller behavior in the market. Recently, Ethereum’s price has been on a downtrend, repeatedly facing rejection around the $2,000 resistance level. The Taker Buy Sell Ratio has consistently remained negative, reflecting a prevailing bearish sentiment in the ETH futures market. However, there has been a notable shift in this metric as it suddenly surged, bringing its value closer to the neutral 0 line. This surge suggests a potential change in sentiment among market participants, indicating a shift towards a more bullish stance. If this metric continues its upward trajectory and enters positive territory, it could signal the beginning of a new phase characterized by bullish price action.
It is crucial to closely monitor these price fluctuations as the upcoming price action around significant support and resistance levels will likely determine Ethereum’s mid-term trajectory.
Sources:
– TradingView: [Link](https://www.tradingview.com/ideas/cryptocurrency/)
– CryptoQuant: [Link](https://cryptopotato.com/wp-content/uploads/2023/09/Ethereum-Taker-Buy-Sell-Ratio-All-Exchanges-SMA-30-1-scaled.jpg)
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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