The Ethereum exchange rate has rolled back to an important support level

The Ethereum (ETH) cryptocurrency failed to show a clear rebound after the collapse in early September

Now the price is inside an important support, the loss of which will confirm the presence of a downtrend.

Ethereum and support level

On September 1, the ETH rate touched a high of $489.57, and the next day fell sharply and reached a low of $311.4 on September 5. Since then, the quotes have been moving in a northerly direction.

However, on October 22, ETH pulled back from the $420 level, where it passes the 0.618% Fibonacci retracement level relative to the bearish move, which now acts as a resistance.

Now the price is in the $390 zone, which should act as a support. Its loss will open the way to the next $365 support.

TradingView’s ETH Chart

Technical indicators on the daily chart take on a negative shape, but do not yet confirm the presence of a bearish trend.

  • The MACD is declining, but has not yet reached negative territory.
  • The RSI is moving in a southerly direction, touching the level of 50.
  • The stochastic oscillator forms a bearish intersection.

A break of the $390 level will confirm the presence of a downtrend, including from the above indicators.

TradingView’s ETH Chart

Future dynamics

Cryptocurrency Trader @CryptoNewton notes that eventually, ETH may break through the current ascending channel and head to new all-time highs.

Source: Twitter

In addition to bearish signals from technical indicators, the price is located inside a parallel ascending channel, which often indicates a corrective move, which means that after the current correction, the price can form falling lows, and not rush to new highs, as the trader suggests on Twitter.

If so, this will mean the completion of the corrective structure A-B-C (blue color on the chart), followed by a bearish breakout of the channel. If the wave rises above the maximum from $420.74, this scenario will lose its relevance.

TradingView’s ETH Chart

On the other hand, the only option in which at this stage we can talk about a bullish impulse is the completion of the wave structure 1-2/1-2 (blue and red colors on the chart). In this case, wave C will have the top of the second part of wave 1 (red).

But even in this scenario, it is expected to fall to the support line of the channel, although with subsequent growth.

If the wave 2 minimum (blue) of $313.9 is lost, this wave analysis will no longer be relevant.

TradingView’s ETH Chart

Conclusion

So, Ethereum has remained in line with the downtrend since the collapse on September 3, and the current rise is of a corrective nature. The loss of the $310 level will confirm this assumption.

On the other hand, in the case of growth and a breakout of the current parallel ascending channel, this scenario is leveled, and the cryptocurrency exchange rate will continue to move in the north direction. At the moment, the implementation of such a forecast looks unlikely.

Disclaimer: Cryptocurrency trading involves a high level of risk and is not suitable for all investors. The opinion expressed in this forecast does not reflect

Disclaimer


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