A Falling triangle pattern on the Ethereum price (1) suggests a 10% decline If ETH breaks through the $1,191 support level, long holdings are likely to get stuck. The negative thesis for the smart contract token will be refuted if the candlestick for the four-hour period closes above $1,340. The price of ethereum is in a phase of consolidation as it remains below a significant resistance level. Despite the likelihood of a quick upward movement to gather liquidity, traders should not mistake this for a bullish directional bias.
Ethereum price will reverse its upward trend
Between November 8 and November 10, the price of ethereum fell by 33% as the FTX exchange shut down over an alleged money-laundering scandal. This bearish movement caused a local bottom at $1,073, which enabled buyers to enter and buy ETH resulting in a 25% rebound rally at a discount.
The midpoint of the $1,073 to $1,607 range, $1,340, was not successfully surpassed, which caused the price of Ethereum to retrace and begin its consolidation. Due to the narrowing of the range, there were two lower highs and three equal lows. A descending triangle configuration may be seen when trend lines link these swing points together.
The analysis
By calculating the distance from the breakout point at $1,191 to the first swing high and swing low, this Ethereum price formation predicts a 9% decline to $1,073. Therefore, a flip of the support above level serves as the trigger for traders. Furthermore, the momentum is primarily negative according to the Relative Strength Index (2), which is consistently below the 50-level. Another failure here will improve the prospects much further. as said earlier. However, there are times when the price of Ethereum may break through the triangle to the upside to collect the buy-stop liquidity that is sitting above the two separate lower lows. This action, known as a fakeout, may catch eager traders on the wrong side.
While the price of Ethereum is rising, investors should be wary of a protracted fakeout. If sellers do not take charge and drive ETH lower, it can build up upward momentum and give buyers the upper hand.In such a scenario, the negative thesis for the smart contract token will be refuted if the price of Ethereum achieves a four-hour candlestick close over $1,340. The potential benefits of such a development will allow ETH to counterbalance the Fair Value Gap’s inefficiency and stigma.
