ETH/USD Weekly Forecast: Risk of Bounce Grows
|Ether continued to decline despite extreme oversold readings on all major timeframes against the US Dollar.|
|The ETH/USD pair is forming a crucial declining wedge with support near $145.00 on the daily chart.|
|ETH/BTC may soon test a major support area at 0.080BTC, which holds a lot of importance for the larger trend.|
Technically, the daily chart indicators have reached extreme oversold readings.
Ether Price Bottom May Find Bottom Soon
The ETH/USD pair broke below the key support at $200.00, which becomes a major resistance now. The downward momentum is further reinforced by both declining 20-period and 10-period moving averages (daily chart).
During the past three days, we discussed the importance of a daily close below $200.00. The pair remained above the stated support for a brief period, but later settled below $200.00 (yesterday’s close was at $197.99).
The price declined and even broke the last swing low of $174.08, forming a new low below $160.00. The current bias is strongly negative, calling for more losses towards $150.00-140.00.
Looking at the daily chart of ETH/USD, there is a crucial declining wedge forming with support near $145.00. The next major support awaits near $145.00, representing a wedge support as well as the May 26, 2017 low.
The wedge pattern on the daily chart may play a key role for Ether’s price since it is a contracting breakout pattern. In due course, the price will have to break the pattern, before making the next move.
Due to recent declines, various important supports have been presented, ranging from $150.00 to $145.00 and $120.00 on the downside. On the upside, the recent broken support at $200.00 becomes a major resistance and now coincides with the wedge upper trend line as well.
Above $200.00, there is a bearish trend line on the 6-hour chart of ETH/USD at $206.00. A close above $200.00-210.00 could push the pair back in the bullish zone.
At this time there is little to suggest Ether wont pursue a recovery. Almost all technical indicators are pointing oversold conditions. Therefore, sellers need to be careful in the near term as the chances of a bottom formation increases in the coming days.