Ethereum (ETH), the world’s second-largest cryptocurrency, may be headed for more trouble in the charts, according to a recent analysis by Cheeky Crypto.
Key Points
- Ethereum’s one-hour chart shows a bearish trend with a death cross (50 EMA below 200 EMA) and trading below the one-hour equilibrium.
- Elliott wave theory suggests an impulsive move to the downside with nested five-wave structures.
- A potential target for the next move up is between $1,613.29 to $1,622.30, but exceeding $1,626.32 could negate the bearish scenario.
- Fair value gaps on the chart are being filled, indicating potential downward movement.
- On the daily chart, Ethereum’s price failed to breach $2,159, reinforcing the bearish outlook.
- The one-week chart also shows a continued breakdown in the bear market.
- A potential future scenario suggests a retracement during the next bull run, with a target between $600 and $3,700.
Technical Analysis
The technical analysis of Ethereum’s charts suggests a bearish trend in the making. The one-hour chart shows a death cross, which is a bearish signal that occurs when the 50-day exponential moving average (EMA) crosses below the 200-day EMA. Additionally, Ethereum is trading below the one-hour equilibrium, which is another sign of bearish momentum.
Elliott wave theory also suggests that Ethereum is in a downward trend. The theory posits that prices move in five-wave structures, and Ethereum’s current price action appears to be forming an impulsive five-wave move to the downside.
Potential Downside Targets
The potential downside targets for Ethereum are between $1,613.29 and $1,622.30. These targets are based on the Fibonacci retracement levels of the previous swing high and swing low. However, if Ethereum exceeds $1,626.32, it could negate the bearish scenario.
Fair Value Gaps
Fair value gaps are areas on a chart where the price has not traded. These gaps can be filled in the future, which can lead to downward movement. On Ethereum’s chart, there are several fair value gaps that are currently being filled. This suggests that there is potential for further downward movement in the near future.
Daily and Weekly Charts
The daily and weekly charts for Ethereum also show a bearish outlook. On the daily chart, Ethereum’s price failed to breach $2,159, which was a key resistance level. This suggests that the sellers are in control.
The one-week chart also shows a continued breakdown in the bear market. Ethereum is currently trading below the 200-week SMA, which is a long-term bearish signal.
Potential Future Scenario
One potential future scenario for Ethereum is a retracement during the next bull run. If this scenario plays out, Ethereum could retrace to a level between $600 and $3,700. This range is based on the Fibonacci retracement levels of the entire bear market.
Conclusion
The technical analysis of Ethereum’s charts suggests a bearish trend in the making. There are several potential downside targets for Ethereum, and the fair value gaps on the chart are currently being filled. The daily and weekly charts also show a bearish outlook. However, it is important to note that this is just one potential scenario. Ethereum is a volatile cryptocurrency, and its price can move in unexpected ways.
Trading Tips
If you are trading Ethereum, it is important to be aware of the risks. The cryptocurrency market is volatile, and prices can move quickly. It is always a good idea to use stop-loss orders to protect your profits and limit your losses.
Disclaimer
This article is not financial advice. Please do your own research before making any investment decisions.
