Ethereum on the defensive as it struggles to consolidate post-price dump

Ethereum has been on a downward trend since mid-June this year, having entered from a region of  relatively lower volatility to one that is much higher, touching lower highs as time passed. Since hitting the $220 mark earlier this month, the price has since fallen and ETH has failed to cross its $240 yearly peak price since mid-July.

Ethereum 12-Hour Chart

Source: TradingView

The chart shows a clear descending broadening wedge, signaling a further drop in price over the coming days, one which is likely to eventually break out above the $200 mark around mid-October, exiting the pattern. For this kind of pattern, there is a near 60% chance of trend reversal, indicating impending bullish movement. The RSI shows a recent recovery from an oversold market, as it moves towards a neutral one between the 30 and 40 point mark.

Daily Chart

Source: TradingView

A quick look at the daily chart shows a channel which is sloping downwards, indicating a likely upwards breakout. The signal line has crossed over the MACD line, while the EMA Ribbon lines seem to be diverging over the price since the mean reversion which occurred recently. The direction of the channel’s slope, along with the indicators, show probable price reduction for the coming weeks.

Ethereum is likely in for a bear market till around mid-October, as it tries to consolidate after the recent price dump on 24 September.