Technically, the 2-hour chart indicators are back in the bullish territory.
Ether Price Formed Bottom or Correcting Higher?
There were a lot of swing moves in ETH/USD during the past few sessions. The pair was down roughly 30 percent before finding strong buying interest near $200.00.
Ether buyers succeeded in defending the $200.00 handle and prevented a complete test of the 76.4 percent Fibonacci retracement level of the last wave from the $133.79 low to $395.41 high at $194.00.
The 2-hour chart of ETH/USD is pointing to a few important bullish signs. First, a reversal candle was formed at $200.91. Second, the pair moved above the 23.6 percent Fibonacci retracement level of the recent decline from the $316.17 high to $200.91 low.
Third, there was a break above a bearish trendline at $245.00. Finally, there were three back-to-back bullish candles, suggesting an increase in buying sentiment. At the outset, Ether’s price is currently trading a few points above the 50 percent Fibonacci retracement level of the last decline from the $316.17 high to $200.91 low.
An immediate resistance rests near $265.00-270.00 (a previous support), followed by the 61.8 percent Fibonacci retracement level of the last drop from the $316.17 high to $200.91 low at $272.00.
Above $272.00, the price could test the $290.00 resistance as well as the bearish trendline at $298.00 on the 6-hour chart of ETH/USD. The last two candles on the same chart suggest an overlapping bullish reversal pattern. However, a proper close above $270.00-272.00 is required for confirmation.
On the downside, an initial support is around $240.00, followed by $220.00. To sum up, the recent bounce is encouraging, but it’s too early to call it a reversal and need to wait for a few more bullish signs.