Technically, the perspective of the short-term trend, ETH/USD was able to carry out clean movements and corrections.
ETH/USD Preparing for a Ride?
Since Thursday, I have tracked a correction pattern in the ETH/USD pair, and was looking for a test of $10.40-00 area. Ether price did test the stated support area to complete the second wave of a 3-wave correction pattern.
Once the price completed the second wave it started moving higher and currently is in the third wave. The final third wave should complete above the last swing high of $11.14. So, it looks like the price is preparing for a ride higher and may spike above the mentioned level.
If we look at the 4-hours chart of the ETH/USD pair, then it is quite clear that the upside move won’t be easy. There is a critical bearish trend line formed on the chart, which may act as a resistance and prevent any major gains. There lies a chance of a move above the $11.14 level as mentioned, but the upside in that case could face sellers near $11.80-12.00.
The $12.00 resistance also represents the 76.4% Fib retracement level of the last drop from the $14.20 high to $7.94 low, which holds importance. Now, if we look at the daily chart of the ETH/USD pair, then there are a few reasons for the buyers to worry.
There is a monster bearish trend line formed, which is currently acting as a resistance. This is the reason why I think today’s close is crucial. If there is a break and close above the trend line resistance, then it may call for further gains. On the other hand, a failure to break could trigger a downside reaction.
In my view, there can be a short-term rally towards $11.80, and then the daily close today may be critical for the next move.