Ethereum (ETH) price is trading in the middle of a long-term pattern. Whether it rebounds or breaks through can determine the future trend.
Readings are mixed on both weekly and daily time frames. Therefore, it is unclear whether the price will initiate a bull run or a crash will occur.
Ethereum Price Deviates from Resistance
ETH is the native token of the Ethereum blockchain, created by Vitalik Buterin. The long-term outlook for ETH is somewhat unclear.
There are positive signs of an upward trend, such as the price breaking a descending resistance line formed from the all-time high.
Such breakouts usually signal the end of the previous trend and the start of a new trend in the opposite direction. Also, the weekly relative strength index (RSI) showed a bullish signal as it held above the 50 level.
However, the decline took it below the $1,900 level area, reconfirmed as resistance (red icon).
So the previous breakout is considered a deviation (red circle). Both are considered bearish signals and usually lead to a decline. If the decline continues, the nearest support is at $1,600.
Weekly ETH/USDT Chart | Source: TradingView
ETH Price Prediction: Rally or Breakout?
A closer look at technical analysis on the daily time frame shows that the price is trading at key levels that are likely to determine the direction of the trend going forward.
ETH price is trading just above the midline of the long-term ascending parallel channel. The centerline of the channel now acts as a support (red circle). If this line helps the price rebound, it could move to the channel’s resistance line at $2,400.
However, a break above the channel’s midline could lead to a drop to the channel’s support line at $1,400.
Also, the daily RSI is below 50 (green circle), another bearish sign.
ETH/USDT daily chart | Source: TradingView
Based on the above indicators, if the decline continues, the nearest support level of $1,600 can be tested, and the next resistance level is at $2,550.
Therefore, whether the price of ETH rebounds from the middle line of the channel or breaks through will determine the future direction of ETH. A bounce can help the price up to $2,500, while a breakdown can lead to a drop to $1,600 and a drop to $1,400.
You can see the token price here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should do their research carefully before making a decision. We are not responsible for your investment decisions.
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