Technically, the indicators on the hourly chart are well below the neutral level, suggesting a bearish bias.
Ether Price Heading Lower?
Yesterday, we saw how Ether price declined towards $10.00 versus the US Dollar before starting a recovery. During the correction phase, the ETH/USD pair traded towards the $10.80 level. The stated level acted as a perfect resistance, as highlighted in the yesterday’s analysis and prevented any further gains.
It was a perfect example of how a support area can later act as a solid resistance. Another important point about the recent rejection was the fact that the pair failed near the 50% Fibonacci retracement level of the last decline from the $11.30 high to $10.24 low.
So, the recent rejection near $10.75-80 can be considered as completion of the correction. The price has already resumed its downtrend, and the chances of it testing the recent low $10.24 once again are very high.
Now, let us try to understand why the recent break below $10.80 was crucial. Looking at the 4-hours chart of ETH/USD, there was a contracting triangle pattern formed. During yesterday’s downside move, the pattern was broken to ignite a bearish wave.
We can see it as the first sign of a bear trend. And, in such cases the price always corrects once to retest the broken support, which happened recently when the price retested $10.80. All these are signs that the ETH/USD pair may continue to trade lower. The next major support where the pair may find buyers is at $10.00.