Ethereum has recently been rejected by a confluence zone that includes the Fibonacci level of 0.618. Now that the price is under control, traders will be looking for any signs of an upcoming deeper movement or trap.
Ethereum’s (ETH(The price action is stalled in a technical significant area, the Fibonacci Retracement Level of 0.618%, calculated from the recent pivot low to high. The daily horizontal resistance, as well as the descending VWAP add to this area’s weight. After many failed attempts at pushing higher, ETH now has begun to reverse, trading below the POC (point of control) of local range.
Points of interest
- Major Resistance Cluster: The Fibonacci number of 0.618 is aligned with the daily resistance as well as a declining VWAP. This creates a technical ceiling.
- Loss of POC A price that is below the control point for volume indicates sellers have taken control of the auction.
- The Bearish Buildings: A stalled breakout and lower highs increase the likelihood of an upward move towards the next important support at $1,540.
Detail analysis
Ethereum has spent several days consolidating its price below a strong resistance zone after a sudden upward move. This 0.618 Fibonacci retracement level is a popular retracement mark. It’s also reinforced by a daily horizontal resistance as well as a decreasing VWAP from the previous major high. This convergence attracted considerable selling pressure. ETH now has failed numerous times to surpass this level.
Recent loss of point of control in this region adds caution to the structure. Now that price is below the high-volume point of the range in question, it suggests the market has stopped accepting these prices. This is often a precursor to range rotation, or a continuation of price in the opposite direction. In this case, the market has rejected the current level.
A clear bearish short-term structure is also visible in the technical landscape. ETH is unable to maintain or print higher lows and highs. This increases the likelihood of a broader corrective move. Next logical support is around $1.540. It’s not just a level that was established in previous sessions, but a level with obvious price anomalies (e.g. single prints and unfilled gaps of fair value).
If the recent swing-low fails to hold, this setup could lead to a 10% decline from current levels. But traders need to be aware of the potential for a fakeout. Ethereum, in previous instances, has shown sudden gains from rejection zones.
Price action to come
Ethereum’s inability to move above the confluence area of 0.618 and its refusal from the POC indicate a greater chance for rotation towards lower supports. If the price drops below the recent swing-low, $1,540 could be the target.
If buyers are able to defend the current level and claim POC then this could be an illusion before prices resume their upward trend. Price is nearing a critical level. For the moment, caution will be warranted.
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Source: crypto.news
