ETH Poised For 11% Correction Following Rejection At $2,400
Ethereum price is back to hunting for higher support, preferably above $2,000 following a recent rejection.
A rising wedge pattern shows that Ether has started an 11% percent retreat to $2,000.
Ethereum is back in the red barely a day after rising to around $2,400. The pioneer smart contract token had led other altcoins into a considerable recovery, gaining ground from $1,730 to nearly $2,400.
Perhaps the failure to close the previous day above $2,400 triggered another bearish dominance move as sellers rushed to take profits. At the time of writing, Ethereum teeters at $2,176 in the wake of a 7% loss over the last 24 hours.
Ethereum Price Poised For Retreat To $2,000
The massive upswing toward the end of last week and on Monday was remarkable but unsustainable. It seems that fundamentals failed to catch up with the colossal price action, or investors were quick enough to sell the news. Either way, the correction is not unique to Ethereum. Especially with Bitcoin balancing around $36,000 after rising to $40,000 at the beginning of the week.
Meanwhile, short-term technical indicators suggest that the correction will continue in the near term. Realize that the Moving Average Convergence Divergence (MACD) has a sell signal on the four-hour chart. The call to sell recently came into the picture as the 12-day exponential moving average (EMA) crossed below the 26-day EMA. The odds for an extended correction could sparkle as the MACD closed the gap to the mean line.
A rising wedge pattern formation on the four-hour chart paints a bearish picture; hence the 11% predicted declines. It is worth mentioning that this pattern forms amid an ongoing uptrend and can be short-term or long-term, depending on the time it took to develop. The upper trendline (resistance) and the lower trendline (support) converge as the pattern matures. A surge in volume at the support break functions as validation for the bearish bias, explaining the progressing retreat from $2,400 toward $2,000.
The correction target of 11% or $2,000 may fail to occur if Ethereum holds above $2,100. Here, bulls will focus on gaining ground back to $2,400 and later to $3,000.
Ethereum Intraday Levels
Spot rate: $2,180
Trend: Bearish
Volatility: High
Support: $2,100 and $2,000
Resistance: $2,400
