Technically, the 4-hour chart indicators turned bearish and moved below their mid-lines.
Ether Price Correction Underway
Yesterday, we noticed that the bullish rally in ETH/USD was running out of steam, which later resulted in heavy downsides.
Ether tumbled against the US Dollar by more than 25% to trade below $150. To start a bearish trend, the pair first broke a connecting support trend line at $190 on the 30-min chart (shown in the chart as bearish break 1).
Thereafter, the pair broke a key support area at $180, and the 50% Fibonacci retracement level of the last wave from the $181.38 low to $211.12 high. It resulted in a sharp downside move towards $140.
The pair attempted a minor recovery and traded towards $165 where it found a bearish trend line. It protected gains above $165, and pushed the pair back below another connecting support trend line at $160 (shown in the chart as bearish break 2).
The price is currently in the third wave, which could end anywhere near $125-130. Once a three-wave correction pattern is complete, there is a chance of ETH/USD crawling back above the $150 level.
Ether buyers now have to overcome many resistances on the way up, including $180-175. It was a crucial support, and now may prevent upsides if the pair attempts a recovery above $160.
The 4-hour chart of ETH/USD clearly points a major downside break below a key bullish trend line at $175. The same trend line prevented yesterday’s slide, and a close below it suggests a short-term bearish bias.
Honestly, it is a much needed correction for Ether, and it’s hard to term the current price action as a reversal. If buyers manage to hold downsides below $110-100, there can be a bounce back.