Is The ETH/USD Rally Sustainable?
|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.