Can Ethereum [ETH] unlock its buying potential after hitting this support level
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Ethereum (ETH) left its short-term investors fairly dissatisfied after failing to uphold the marks of its Point of Control (POC, red) at $3,000. The ripples of the broader selling sentiment pulled the alt to its $2,700 baseline.
With price retesting its 15-month trendline support, ETH would likely see itself sailing toward the $2,900-mark before any trend-altering move. At press time, ETH was trading at $2,763.9, down by 2.2% in the last 24 hours.
ETH Daily Chart
The evening star candlestick setup bogged down ETH’s revival towards its early April highs. Due to this, the alt remained restricted below the $3,500 level.
Now, ETH attempted to break the red candle streak formed in the last two days as the selling pressure eased towards its immediate trendline support (yellow, dashed). Historically, the buyers have defended this bullish trendline support for over 15 months.
The current falling wedge (white) devaluation has spiraled the selling edge while the EMA ribbons take on a bearish flip on the daily timeframe. With the rising gap between moving average lines, the bears displayed their increasing dominance in the near term. Also, considering the sturdiness of the 200 EMA resistance (green), the sellers refrained from giving up their control over the long-term trend.
The conflux between the horizontal and the trendline support could propel a short-term recovery toward the upper trendline of the wedge. A patterned breakout could position ETH to retest its POC and gather thrust to overturn its EMA ribbons.
By and large, the RSI resonated with the price movements while marking a falling wedge setup on its oscillator. To reclaim their lost advantage, the buyers needed to break the bonds of the current wedge and look for a poke of its mid-line.
The OBV agreed with a buying revival narrative in the short-term after marking a bullish divergence with price in the last week.
In the light of ETH’s historical biases to bounce back from its trendline support coupled with the bullish divergence with OBV, the altcoin could see a short-term revival on its charts. From a longer perspective, the $2,900-zone could pose hindrances in a potential break-out rally.
At last, investors/traders need to watch out for Bitcoin’s movement. Especially since ETH shares an 87% 30-day correlation with the king coin.