Ethereum is now in a zone of major convergence near 2,550 dollars, where technical resistances and multiple indicators at high time frames converge. The declining volume as well as the previous range behavior suggest that this area is important for the direction of next move.
Ethereum has bounced back from a condition of oversold.ETH) has retraced into a region packed with resistance, the same zone that previously capped price action for over 40 days. The region contains the previous range’s point of control, VWAP, the high-time frame resistance and the golden Fibonacci Retracement. All these elements indicate a rejection is likely unless the volume increases.
Points of interest
- Major Resistance for $2,550 Included is the high-time frame SR (Standard Relative Time), 0.618 Fibonacci Level, and Range Point of Control.
- The volume profile shows a weak demand: The current resistance rally has not been accompanied by a significant volume increase.
- Range formation Likely to be: It could take weeks to reach a balance between resistance of $2.550 and support of $2.220.
Ethereum had previously been rotating within a range of 43 days defined by the Value Area Highs (VAH) & Value Area Lows (VAL). Recently, the price swept through this range and bounced aggressively. This could be a relief rally for oversold conditions. But this bounce landed right in the middle of the old range’s point of control, which is the zone with the most volume. It can act as a strong resistance.
The VWAP that is anchored to the prior swing-high intersects this area, as does the golden Fibonacci pocket of 0.618. They are all clustered at $2,550. This convergence of technical indicator increases the probability of a negative rejection, unless high-volume breakouts occur.
Bulls are concerned about the low volume. Low-volume pushing into multiple-layer resistance results in rejection. Right now, this is supported by the lack of aggressive demand. Ethereum is likely to make a lower top if it fails to hold and break above $2,550. It will then begin to rotate back towards the $2220 support.
A rejection of this magnitude would create a range that spans between $2,550 to $2,220 and echo the rotational pattern from over 40 days ago. Ethereum will likely remain in this range until volume breaks decisively above $2,550.
Price action to come
Ethereum has reached a critical inflection. Expect rotational behaviour between $2.220 and 2.550 as long the price stays below the resistance zone of $2.550. If this level is rejected, it would indicate a new lower high. The consolidation will continue.
A breakout supported by a strong volume can quickly change the story and pave the way for trend continuation.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: crypto.news
