The ETH/USD pair recent upside ride was convincing, but we cannot discard the fact that it won’t be easy for the rally to sustain without corrections.
A successfully completed hard fork ignited a sharp upside move in Ether price against the US Dollar.
The ETH/USD pair traded as high as $13.44 (market average price) where it found offers and started a downside move.
The pair already started correcting lower and looks set for more weakness in the near term.
Ether price recovery kicked off after a consolidation against the US Dollar. My view remains buy dips as long as there is constructive wave with corrections.
ETH/USD Ride & Correction
The Ether gained against majority of its peers, including the US Dollar to set a new weekly high of $13.44 where it found renewed selling interest. The ETH/USD pair already started to correct lower, and also broke a bullish trend line formed on the hourly chart (yellow).
The price even moved below the 23.6% Fib retracement level of the last wave from the $10.42 low to $13.44 high. It is currently following a bearish trend line (orange) on the same chart, which is acting as a resistance and preventing an upside move.
The candle which posted a weekly high shows a rejection pattern on the hourly chart. So, there is a huge risk of Ether price to extend its current correction phase.
No doubt, the recent rally in ETH/USD was convincing, as there was a major resistance trend line break on the 6-hours chart. However, at the same time there is also a bearish candle pattern forming around the $13.00 level, signaling a short-term top in ETH/USD.
In my view, the current correction may extend and could push the price towards the $12.00 level. There is even a chance of a test of $11.60, which also represents the 61.8% Fib retracement level of the last wave from the $10.42 low to $13.44 high.
Important Resistance Levels
$12.80 and $13.00
Important Support Levels
$12.00 and $11.60
The RSI is still above the 50, which is a sign of the recent strength in ETH/USD.
The MACD is about to move into the bearish slope, suggesting a downside reaction in ETH/USD.
Aayush has spent over seven years as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possess strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets. He is a software engineer by profession, loves blogging and observing financial marketsETHNews is commited to its Editorial Policy
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