ETH/USD Forecast: Examining False Downside Break
|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.
Looking at the hourly chart of ETH/USD, there are a few important points to note:
- A break below the $90.00 level triggered a sharp decline with an increase in selling pressure.
- The pair found support at $83.00 and with the help of strong bids, recovered sharply.
- The candle formed near the $83.00 swing low is a picture perfect reversal pattern and suggests that the decline was a false move.
- 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.
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.