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ETH/USD Forecast: Examining False Downside Break

By

Aayush

Jindal

Guest AnalystETHNews.com

Ether tumbled against the US Dollar and Bitcoin, but the price action in ETH/USD suggests it was a false break.

Key Highlights

A sharp downside move in ETH/USD was quickly reversed from the $82.00-83.00 support.
The decline from $91.00 to $83.00 does not look real, and can be termed as a false break.
The ETH/BTC pair failed to recover like ETH/USD, and fell below 0.050BTC.

Technically, the hourly chart indicators are back in the bullish territory and looking to extend gains.

Ether Price Reversal

The recent Ether sell-off and subsequent break below $85.00 against the US Dollar found support near $83.00. Similarly, ETH/BTC failed to recover after settling below the 0.050BTC support.

Ether Price Analysis Chart

Looking at the hourly chart of ETH/USD, there are a few important points to note:

  1. A break below the $90.00 level triggered a sharp decline with an increase in selling pressure.
  2. The pair found support at $83.00 and with the help of strong bids, recovered sharply.
  3. The candle formed near the $83.00 swing low is a picture perfect reversal pattern and suggests that the decline was a false move.
  4. The current price action is bullish and pointing continuation of the recovery.

The most significant reversal signal was a close back above $89.00-90.00. ETH/USD also broke a major bearish trend line on the hourly chart with back to back bullish candles.

Another important move was above the 50% Fibonacci retracement level of the last decline from the $96.10 high to $82.99 low.

However, the pair may face sellers near $92.00-92.50 since it around the 61.8% Fibonacci retracement level of the last decline from the $96.10 high to $82.99 low.

Ethereum ETH USD Forecast

The 4-hour chart of ETH/USD also highlights a reversal candle, which may close as a bullish hammer for an upside move. Earlier, there was a break below a bullish trend line at $92.50, igniting losses towards $83.00.

Overall, the recent decline can be ignored considering the hourly and 4-hour chart candlestick patters. A push above $92.00 would indicate the next bullish wave for gain to $95.00.

Important Resistance Levels

$92.00 and $95.00

Important Support Levels

$89.00 and $83.00

Hourly RSI

The RSI is now well above the 50 level and heading north.

Hourly MACD

The MACD is back in the bullish zone, and gaining momentum.

Aayush Jindal

Aayush has spent over seven years as a financial markets contributor and observer. He specializes in market strategies and technical analysis. He strives to provide entertaining and informative analysis of the currency and commodities markets. He is a software engineer by profession and loves blogging.

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