Ethereum dropped below $1,650 versus the US dollar. To avoid a sharp bearish reversal, ETH must remain above the $1,550 support zone.
A cup and handle pattern is forming on the daily ETH/USDT technical chart. In response to this pattern, the coin price should increase and break through the neckline resistance of $2000. As a result, the Ethereum price would obtain an early signal for a trend reversal, allowing it to achieve the primary goal of $2500. However, the currency is currently trading at $1620, down 5.86% in the last 24 hours.
Yesterday's sell-off started with the release of the latest consumer price index (CPI) data, which showed 8.3% year-on-year inflation. The bearish momentum accelerated, however, as the CME FedWatch Tool indicated a 20% possibility of a 100 basis point (bps) or 1% interest rate hike. As a result, market sentiment is once again in turbulence, with many questioning if the bottom has really formed.
The bulls have pushed the price above the 23.6% Fib retracement level of the decline from the $1,789 swing high to the $1,552 low. On the upside, the price is facing resistance at $1,620.
The next major resistance is situated between $1,660 and $1,670. It is close to the 50% Fib retracement level of the fall from the $1,789 swing high to the $1,552 low. A clear break over $1,670 might push the price above $1,700.
In any case, the technical chart now indicates a bullish reversal pattern controlling the Ethereum price action, so traders may continue a bullish outlook until the swing low support of $1420 is breached.
The bearish engulfing candle is currently retesting the combined support of $1550 and the upcoming support trendline. However, if today's daily candle closes above this support, the price may be able to recover.
A possible reversal from this concentrated support would push the cryptocurrency 28% higher to the neckline of the previously mentioned pattern.
According to Price Analysis, The market capitalization of this ETH is estimated to be $197,995,100,872. The 24-hour trading volume for the same coin is around $23,530,523,286.
On the upside, a major resistance is located at the $1660 level. A closing over the $1660 resistance level might cause a fresh rally. In the mentioned situation, the price might rise to $1700. Any further advances might push the price up to the $1800 psychological level.
If ETH fails to break over the 1660 major resistance level, it may continue to fall below $1580. The next big level of support is at $1550. If it fails to maintain this level, strong panic selling might occur, possibly reaching the $1400 milestone.
KEY LEVELS :
RESISTANCE LEVEL : $1680-$1740
SUPPORT LEVEL : $1550-$1480
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