Ethereum - Correction of the downtrend is due to end
Updated
Ethereum has been trading sideways since 13th May 2022; we believe that the flat price action indicates a downtrend correction, which aligns with the price retracement toward its 20-day simple moving average. Our view is also supported by declining volume across hourly and daily time frames. Fundamental factors also point to more downside as more hiking in the U.S. and economic tightening are set to worsen market conditions. As a result, we expect the stock market to drag risk assets lower, which applies to Ethereum, Bitcoin, and other cryptocurrencies. We forecast an eventual breakdown of ETHUSD and new lows to be formed. At the moment, we would like to set new price targets for ETHUSD at 1900 USD and 1800 USD.
Illustration 1.01
Illustration 1.01 shows ETHUSD on the daily chart. The yellow arrow hints at the price retracement towards its 20-day SMA. The red arrow shows a sharp decline in volume over the past three days (the third day is still being observed).
Technical analysis - daily time frame
RSI, MACD, and Stochastic are pointing upwards, which is bullish. However, MACD remains in the bearish zone. Additionally, we expect the eventual failure of RSI and Stochastic to move higher. DM+ and DM- continue to show bearish conditions in the market. The ADX shows a recent drop, which is reflected in the current correction. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. The ADX increases, which hints at a strenghtening bearish trend of a higher degree. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Illustration 1.01
Illustration 1.01 shows ETHUSD on the daily chart. The yellow arrow hints at the price retracement towards its 20-day SMA. The red arrow shows a sharp decline in volume over the past three days (the third day is still being observed).
Technical analysis - daily time frame
RSI, MACD, and Stochastic are pointing upwards, which is bullish. However, MACD remains in the bearish zone. Additionally, we expect the eventual failure of RSI and Stochastic to move higher. DM+ and DM- continue to show bearish conditions in the market. The ADX shows a recent drop, which is reflected in the current correction. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. The ADX increases, which hints at a strenghtening bearish trend of a higher degree. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade closed: target reached
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