The increased selling pressure in the crypto market could be associated with the recent release of the Personal Consumption Expenditures (PCE) index. The crypto market reacted negatively to its higher-than-expected value and triggered a correction phase in the majority of the major coins. Thus, the Ethereum price, with no exception, turned down from $1720 and initiated a new bear cycle within the megaphone. Here’s how this pattern may further influence the ETH’s future price.
- A megaphone formation hints at increased volatility and uncertainty as it is formed by two diverging trendlines and a series of higher highs and lower lows.
- The ongoing bear cycle with the megaphone put could plunge the Ether price to a lower support trendline indicating a potential 8-9% downfall.
- The intraday trading volume in Ether is $8.28 billion, indicating a 7.5% gain.
The Ethereum coin daily time frame chart displays a brief phase of consolidation in the past few weeks, despite a series of higher high formations. It is because, overall, the price action is attempting to form a megaphone pattern in the daily chart due to the 10% dip to the $1500 level.
Currently, the price trend shows a correction phase that will possibly reach the $1500 mark before showing any signal of recovery. In case the correction continues below $1500, it will test the declining trendline of the megaphone pattern. Hence, short-term buyers can find entry spots at these two levels.
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At press time, the ETH market price is at $1600 with an intraday fall of 0.43% and minimum price movement. Traders can expect an increase in volume by the end of the day resulting in a rapid movement leading the price closer to the support level of $1500.
However, if the ETH price sustains above the support trendline, the coin holders may witness a prolonged consolidation.
RSI: The daily RSI slope is declining with the correction phase, but the diverging rate increases the possibility of a bullish divergence as it reaches $1500 support. In such a case, traders can find a double bottom pattern with the support of RSI divergence, giving a high probability of a bull run in March 2023.
EMAs: The daily 200 and 50-day EMAs are giving a golden crossover, but the growing uncertainty reflected by the technical pattern warns investors to wait till the correction phase bottoms out.
Ethereum Coin Price Intraday Levels-
- Spot rate: $1600
- Trend: slightly bearish
- Volatility: High
- Resistance level- $1680 and $1788
- Support level- $1500 and $1420
The post This Daily Chart Pattern Puts Ethereum Price At An 8% Downside Risk appeared first on CoinGape.
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