Ethereum (CRYPTO: ETH) is trading higher Wednesday and is desperately trying to hold above the higher low trendline. This trendline has held many times in the past and is now possibly seeing a break below. This has the potential to cause a strong bear market in the crypto if selling pressure gets stronger.
Ethereum was up 2.46% at $2,564.13 Tuesday at publication.
Ethereum Daily Chart Analysis
- Ethereum is attempting to bounce off the higher low trendline in what traders call an ascending triangle pattern. This pattern is showing resistance near the $4,000 level and support near the higher low trendline. If this support falls, the crypto may see a strong period of downward movement before finding support again.
- The crypto trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the crypto has been trading with a bearish sentiment in recent weeks. Each of these moving averages may hold as an area of resistance in the future.
- The Relative Strength Index (RSI) has been sliding downward the past few weeks and sits at 42. This shows selling pressure is outweighing the buying pressure and has been trending more into selling territory the past couple of weeks.
What’s Next For Ethereum?
If Ethereum crosses below the higher low trendline and can hold below it, it will be a bearish sign for the future. This would show that Ethereum can't continue the upward trend it has been trading on and was unable to form higher lows again. The crypto could also find support near the trendline and start pushing higher once again. Only time will tell what happens to Ethereum. Bullish traders want the crypto to bounce off the trendline and start pushing higher again, seeing the RSI climb back above the middle line. Bearish traders want the crypto to break below the trendline and start pushing lower on the RSI.
Photo by Kanchanara on Unsplash
