Ethereum traded at $2.450 after a strong weekly rally that stalled under $2.550. Its 4-hour chart also formed a bull flag, which could determine the next big move.
The following is a summary of the information that you will find on this page.
- Ethereum’s price is around $2.450. It reached a 7-day high of $2.546.
- The immediate value of a 4-hour bull-flag is between $2,550 and $2,500.
- The daily RSI reached 75.59 in the last 24 hours, indicating a strong but extended momentum.
- CoinGlass shows that the largest clusters of liquidation are near $2,550 and 2300.
Ethereum prices consolidate after their weekly surge
Crypto.news reports that Ethereum (ETHAt the time this article was written, the price had reached $2,452, retaining most of the gains from the sharp break last week.
ETH began trading at $2,251.44 in the morning of August 20, and rose as high as $2,545.88 intraday on the day following. The move between the opening price on Aug. 20 and the weekly high was a gain in the region of 13%.
When measured in relation to the zone of consolidation near $1900, which preceded the break-out, the advance is larger. Ethereum gained almost 34% in the time between this level and its weekly high, before both buyers and sellers found a temporary equilibrium.
The price range has been largely unchanged since then. It is now mainly between $2,500 and $2,400. This tight range indicates that traders are not yet fully reversing the rally, despite failing to reach above $2.550.
This recovery was also a marked change from Ethereum’s previous weakness. ETH spent most of August in a sideways movement below $1950, before breaking over $2,000 and accelerating towards $2,500.
US investors will also be watching the broader conditions of liquidity, after bond yields fell and supported an asset recovery. After the initial surge and short squeeze, crypto traders will assess whether these conditions are able to sustain demand for spot.
Ethereum Bull Flag Points to Resistance at $2.550
On the chart of ETH/USDT for 4 hours, price is consolidating in a downsloping channel after its move near-vertical from around $1900.
A structure like this can become a bull’s flag after a significant advance. Ethereum must close above the upper channel boundary (currently located between $2,510 and $2,530) to confirm.
If the $2,546 recent high is successfully broken out then it will be clear what to expect. The buyers would need to first establish support at $2,550 in order to target higher levels.
Ted Pillows, a crypto analyst, identified this area as the major barrier for another leg up. Pillows stated in a post on X dated Aug. 26, that Ethereum would need to close the week above $2.550 before it could move towards $3,000.
The current chart does not confirm the $3,000 goal because ETH is still below the breakout point. The price could be held in its short-term pattern by a weekly rejection between $2,500 and $2,550.
The 4-hour flag’s lower boundary is currently between $2330 and 2360. If the price breaks below the area, it will weaken and possibly increase the risk of further declines.
Momentum cools as daily RSI reaches 75
Ethereum’s chart is still bullish on a daily basis, but momentum measurements show the rally as being stretched.
Its daily Relative Strength Index was 75.59. This is above the 70 threshold that many traders use to indicate overbought conditions. The RSI’s moving average fell to 68.56.
A RSI that is overbought does not mean the price will drop. The RSI shows rapid acceleration of buying and Ethereum could need to pull back or consolidate before continuing its sustained upward trend.
The Supertrend remains positive, and the broader trend is supported at around $2158. ETH is currently trading at a level almost 14% higher than that, allowing for a slight correction to occur without reversing our daily bullish pattern.
Already, the short-term trend has begun to weaken. The Moving Average Convergence divergence line on the 4-hour chart was at 33.60 and below the signal line of 47.59. The histogram was now at negative 13.99, reflecting a loss of momentum.
The Average Directional Index, at 40.76 indicates a strong trend. ADX, however, has now turned down from its recent high, adding further evidence that the rapid increase is losing strength while ETH trades in a sideways fashion.
The indicators show that Ethereum is still on track to recover, however, it will depend on how well buyers are able to absorb the profit taking above $2,500.
Ethereum’s next move will be shaped by the liquidation clusters
CoinGlass’ one-week Ethereum Liquidation heatmap shows large leveraged positions to both sides of current price.
Around $2,530 to 2,560 appears to be the nearest major pool to Ethereum. If ETH moves into this zone, leveraged shorts could be forced to close their positions. This would add buying pressure when ETH retests the weekly high.
This is the level where the brightest band of the heatmap above the market aligns with the resistance technical identified in the price chart. This overlap is important to both derivatives and spot traders.
Around $2,300 and $2,330, a larger cluster of downside liquidity is evident. Ethereum’s price may move to the area around $2,400 if it loses its lower flag edge and if Ethereum drops below that level.
Around $2,200 there is a distribution of additional liquidity, while far-flung clusters are visible around $2,000 or $1,900. These lower levels will only become important if ETH’s newly-established daily trend support is lost.
Analyst Michaël van de Poppe said On Aug. 26, he said that a good time to purchase Ethereum at a discount could be nearing. The chart shows that the demand area is below the current prices, roughly matching the visible support between $2,300 to $2,400.
Ethereum faces two distinct short-term scenarios. Closes above $2.550 could confirm renewed strength. This would support an expansion towards higher resistance. Losses below $2.330 invalidate the 4-hour Bull Flag and would expose the Supertrend Support near $2.158.
ETH may remain consolidating until one of these boundaries breaks. Traders will decide if the rally over seven days has generated enough demand to propel it higher.
This article is not intended to be investment advice. This page is intended for informational purposes only.
“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
