Technically, the 6-hour chart indicators are struggling to gain bullish momentum, suggesting caution.
Why Ether Price Failed Near $225.00?
Yesterday, we saw how ETH/USD’s upside move was capped by $225.00. The pair struggled after creating a minor top at $226.40 and traded lower.
Looking at the 2-hour chart, there is a major descending wedge with support at $200.00-195.00 formed. The recent rejection at $225.00 was near the wedge trendline resistance.
At the moment, the pair is trading near the wedge support at $200.00. Considering the price action, it seems like the pair is in an indecision phase. The last 4-5 candles on the 2-hour chart are improper and suggesting neutral bias.
If ETH/USD fails to move below the wedge support, a move towards $220.00 is the most likely scenario. However, a breakout above the wedge resistance at $220.00 would risk stronger upside towards $250.00.
Moving on to the 6-hour chart, there are a few important points to note:
- There is a crucial bearish trendline with current resistance at $218.00, capping the upside move.
- The same trendline stopped the last wave near $225.00.
- The $225.00 level acted as a support turned resistance and prevented gains.
- On the downside, there is a monthly support formed at $175.00.
It seems like the pair is in a 3-wave pattern and the first leg was from $174.08 to $226.40. The pair is currently in the second leg from $226.40 to $193.01, which is about to complete.
The final third leg could decide the next move in ETH/USD, depending on whether buyers can contain losses below $200.00.
In the short term, the momentum is clearly negative, but it has again come down a daily close below $200.00. The next 4-5 sessions could end indecision.