Ethereum (ETH/USD) Weekly Analysis – Rising Wedge Breakdown Signals Deep Bearish Continuation Toward $480
📌 Overview
Ethereum (ETH) has shown significant structural weakness following a long-term Rising Wedge formation breakdown on the weekly timeframe. The current market structure suggests a continuation of the bearish trend, possibly reaching the $480 level, which aligns with a major historical support zone.
This analysis provides a complete breakdown of the pattern, entry strategy, stop loss logic, and long-term outlook — ideal for swing and position traders.
🧠 1. Market Structure: Rising Wedge Breakdown
The Rising Wedge is one of the most reliable bearish reversal patterns when it forms after a strong uptrend — and this setup follows that textbook behavior.
🔍 Key Characteristics of the Pattern:
The pattern began forming after Ethereum’s surge above $1,000.
Price made successive higher highs and higher lows, converging within the wedge.
Resistance at ~$4,000 was tested multiple times, creating a triple top, which further strengthens bearish conviction.
The support trendline was broken decisively, with strong bearish candles and increasing volume — signaling the start of a downtrend.
This confirms the loss of bullish momentum and the start of a trend reversal on the higher timeframe.
🔑 2. Key Technical Levels
🔻 Resistance Zone: $3,800–$4,000
Rejected multiple times since 2021.
Formed the upper boundary of the wedge.
Now a confirmed resistance that is unlikely to be broken without major catalysts.
🔸 Intermediate Resistance (Retest Zone): ~$2,000
Previous support within the wedge.
Now being retested as new resistance — ideal short re-entry zone for trend traders.
🔵 Support Zone (Target): $480–$500
Historical accumulation zone during mid-2020 and mid-2022.
Significant price memory exists here; likely to attract long-term buyers.
Defined as the ultimate downside target for this bearish setup.
🚨 Stop Loss Level: $3,294.6
Above the last swing high.
Logical invalidation point for any bearish trade.
📉 3. Trend Continuation and Momentum Analysis
Post-wedge breakdown, the price has continued to form lower highs and lower lows, indicating the dominance of sellers. The market psychology is now shifting toward a bearish narrative:
Buyers have failed to reclaim any major structure.
Sellers continue to defend every bounce.
Volume increases on red candles — showing institutional and large-scale exit activity.
Support zones are not holding, and bounces are shallow.
The retracement phase we’re seeing now is likely a dead cat bounce or a bear market rally.
💼 4. Trade Setup
✅ Short Entry Zone: $1,900–$2,000
Optimal entry upon bearish confirmation (e.g., bearish engulfing, doji rejection).
Enter on lower timeframe (daily or 4H) rejection candles.
🎯 Take Profit (TP): $480.3
Aligns with the major historical support area.
Based on measured move and structure break projection.
🛑 Stop Loss (SL): $3,294.6
Safely placed above invalidation structure.
Protects against unexpected bullish reversal or fakeouts.
⚖️ Risk/Reward Ratio:
Targeting a high R/R trade (minimum 4:1 depending on entry).
Ideal for position traders looking for multi-month setups.
📅 5. Timeframe & Projection
This is a weekly timeframe setup, meaning the trade could unfold over weeks or even months. Patience is key, especially when trading macro structures. Keep monitoring for:
Weak bullish reactions at $2,000 zone.
Volume divergence on retests.
Bearish candlestick formations before entry.
🧭 6. Investor Sentiment and Macro Context
From a broader perspective:
Ethereum continues to underperform during risk-off macro cycles.
Tightening global liquidity and weak altcoin recovery trends support the bearish outlook.
ETH is struggling to retain developer dominance post-merge amid rising competition.
Bear market rallies often trap retail traders — this setup aims to trade in the direction of smart money.
🧩 7. Summary & Strategic View
Ethereum has broken decisively from a rising wedge — a bearish chart pattern that rarely fails on higher timeframes. The rejection from multi-year resistance, break of structure, and failure to reclaim support all point to further downside.
🔑 To summarize:
Trend: Bearish (Confirmed by wedge breakdown and lower highs/lows)
Entry: Short on rejection at $1,900–$2,000
Target: $480
Stop Loss: $3,294.6
Strategy: Trend continuation / swing short
This is a high-probability setup based on classical technical analysis and confirmed market structure. As always, manage your risk and let the trade come to you.
📌 Overview
Ethereum (ETH) has shown significant structural weakness following a long-term Rising Wedge formation breakdown on the weekly timeframe. The current market structure suggests a continuation of the bearish trend, possibly reaching the $480 level, which aligns with a major historical support zone.
This analysis provides a complete breakdown of the pattern, entry strategy, stop loss logic, and long-term outlook — ideal for swing and position traders.
🧠 1. Market Structure: Rising Wedge Breakdown
The Rising Wedge is one of the most reliable bearish reversal patterns when it forms after a strong uptrend — and this setup follows that textbook behavior.
🔍 Key Characteristics of the Pattern:
The pattern began forming after Ethereum’s surge above $1,000.
Price made successive higher highs and higher lows, converging within the wedge.
Resistance at ~$4,000 was tested multiple times, creating a triple top, which further strengthens bearish conviction.
The support trendline was broken decisively, with strong bearish candles and increasing volume — signaling the start of a downtrend.
This confirms the loss of bullish momentum and the start of a trend reversal on the higher timeframe.
🔑 2. Key Technical Levels
🔻 Resistance Zone: $3,800–$4,000
Rejected multiple times since 2021.
Formed the upper boundary of the wedge.
Now a confirmed resistance that is unlikely to be broken without major catalysts.
🔸 Intermediate Resistance (Retest Zone): ~$2,000
Previous support within the wedge.
Now being retested as new resistance — ideal short re-entry zone for trend traders.
🔵 Support Zone (Target): $480–$500
Historical accumulation zone during mid-2020 and mid-2022.
Significant price memory exists here; likely to attract long-term buyers.
Defined as the ultimate downside target for this bearish setup.
🚨 Stop Loss Level: $3,294.6
Above the last swing high.
Logical invalidation point for any bearish trade.
📉 3. Trend Continuation and Momentum Analysis
Post-wedge breakdown, the price has continued to form lower highs and lower lows, indicating the dominance of sellers. The market psychology is now shifting toward a bearish narrative:
Buyers have failed to reclaim any major structure.
Sellers continue to defend every bounce.
Volume increases on red candles — showing institutional and large-scale exit activity.
Support zones are not holding, and bounces are shallow.
The retracement phase we’re seeing now is likely a dead cat bounce or a bear market rally.
💼 4. Trade Setup
✅ Short Entry Zone: $1,900–$2,000
Optimal entry upon bearish confirmation (e.g., bearish engulfing, doji rejection).
Enter on lower timeframe (daily or 4H) rejection candles.
🎯 Take Profit (TP): $480.3
Aligns with the major historical support area.
Based on measured move and structure break projection.
🛑 Stop Loss (SL): $3,294.6
Safely placed above invalidation structure.
Protects against unexpected bullish reversal or fakeouts.
⚖️ Risk/Reward Ratio:
Targeting a high R/R trade (minimum 4:1 depending on entry).
Ideal for position traders looking for multi-month setups.
📅 5. Timeframe & Projection
This is a weekly timeframe setup, meaning the trade could unfold over weeks or even months. Patience is key, especially when trading macro structures. Keep monitoring for:
Weak bullish reactions at $2,000 zone.
Volume divergence on retests.
Bearish candlestick formations before entry.
🧭 6. Investor Sentiment and Macro Context
From a broader perspective:
Ethereum continues to underperform during risk-off macro cycles.
Tightening global liquidity and weak altcoin recovery trends support the bearish outlook.
ETH is struggling to retain developer dominance post-merge amid rising competition.
Bear market rallies often trap retail traders — this setup aims to trade in the direction of smart money.
🧩 7. Summary & Strategic View
Ethereum has broken decisively from a rising wedge — a bearish chart pattern that rarely fails on higher timeframes. The rejection from multi-year resistance, break of structure, and failure to reclaim support all point to further downside.
🔑 To summarize:
Trend: Bearish (Confirmed by wedge breakdown and lower highs/lows)
Entry: Short on rejection at $1,900–$2,000
Target: $480
Stop Loss: $3,294.6
Strategy: Trend continuation / swing short
This is a high-probability setup based on classical technical analysis and confirmed market structure. As always, manage your risk and let the trade come to you.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.