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The crypto market started the early hours of August in red, following the significant downtrend in July. Amid this sell-off, the ETH sellers tried to take advantage by breaking below the support trendline of the megaphone pattern. However, by the day’s end, the buyers stepped in and pushed the price higher evidenced by the daily candle printed on August 1st. Will this fake breakdown bolster buyers for a bullish recovery?
Also Read: After Bitcoin, Financial Giants Rush to Apply for Ethereum Futures ETFs
Ethereum Price Daily Chart
- The megaphone pattern is characterized by two diverging trend lines that produce progressive higher swing and violate market sentiment.
- By the press time, the Ethereum price trades at $1845, with an intraday of 1.02%.
- The intraday trading volume in Ether is $6.93 Billion, indicating a 17% gain.
Source- Tradingview
For the past two weeks, the Ethereum price has wavered sideways above the support trendline of the megaphone pattern. Amid the pattern formation, the coin price action resonates between two diverging trendlines until it gives a significant breakout from either one.
Thus, a retest to the support trendline was expected to provide strong support, but the observed long consolidation indicates the bulls need to build enough momentum. Having said that, the long-tail rejection candle in August indicates the buyers still defending the bottom support, preserving the potential of a bullish reversal.
If the buying pressure rises, an upside breakout from the immediate resistance will offer buyers a higher footing to kickstart a new recovery within the megaphone pattern. The potential upswing could lead to a rally to $2140.
Is Ethereum Poised for Extended Correction?
In case the overhead supply pressure persists, the ETH sellers may give another attempt to break down the lower trendline. For better confirmation, the potential short-sellers must wait for a daily candle closing below the trendline. The possible breakdown will prolong the correction fall to $1800.
- Moving average convergence divergence: A narrow spread between the MACD(blue) and signal(orange) slope near the midline indicates a neutral sentiment in the market.
- Super Trend: the green film projected in the daily chart reflects the short-term trend that remains bullish.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
