Ethereum (ETH) - The $1400 in the sights?

Ethereum (ETH) – The $1000, support for a new flight?

A welcome relief at the heart of the bear run of the prince of cryptos? – For the second week in less than a month, Ethereum (ETH) is attempting a new rally to avoid the threat below the $1000 support. Even though it is trading above this critical level at the time of writing, the upside safety margin remains small. A grain of sand should not infiltrate this fragile mechanism, whatever its origin.

Given that ETH prices look set to pause, sellers are reluctant to deliver the final blow below levels that helped kick off the last bull run. Between maintaining its short positions and settling part of their profits before returning to the charge later, the equation deserves to be asked. Hence the importance of not wrongly dismissing a technical rebound to which many investors cling.

This analysis of the Ethereum price is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.

Ethereum in weekly units – A slight rapprochement between prices and the Tenkan

It may not be a big deal! But we will have to be satisfied with this small favorable technical signal. In effect, Ethereum prices are slightly approaching the Tenkan (the most fragile curve of the Ichimoku) according to the latest movements. Assuming the current week ends as it started, we would correct the excess downside of the powerful second corrective wave since the last break below the $3400 resistance.

But despite this potential return to form, ETH prices and the Chikou Span would not see their situation with respect to the Kumo (cloud) change drastically. Especially since a return to the level of the Tenkan, the resistance of $1700 or that of $2300, would probably not be enough to commit us to a favorable trend reversal.

Besides, given that the supports didn’t last long on the weekly chart, I wouldn’t make the same bet regarding the resistances in the middle of the bear run. Based on these relentless observations, a technical bounce would be the best scenario cryptocurrency investors can reap. In itself, it would reflect an intermediate phase allowing room for capitulation when the time comes.

Ethereum in daily units – A bullish chart pattern in formation?

If the weekly technical analysis is not currently offering the desired result, there would be reason to smile cautiously in daily units. And for good reason, Ethereum prices have been oscillating between the $1000-1250 area for a few days to the point of forming a bullish chart pattern, the double bottom. This would underline a waning of the bearish pressure since the break of the support of $1700 and $1400, under certain conditions.

Ethereum price analysis in daily units - July 05, 2022

As a reminder, the double bottom is the opposite of the W-shaped double top. The prices of the underlying fail for the first time on the neck line (or resistance) after having relied on a support. During the second attempt from this same support, they manage to cross it unceremoniously. So much so that sellers have to salvage furniture until they manage to limit the damage. As for the theoretical objective of the chartist pattern, it corresponds to the transfer of the amplitude between the support and the neck line from the latter.

Bullish chart pattern: double bottom

In the present case, this would augur ETH prices at $1550-1700 by pushing the detail to within a few tens of dollars. Thus, by successively crossing the Tenkan, the Kijun and the resistance of $1400, they would come back inside the Kumo. What had not happened since the end of last April. On the other hand, the Chikou Span would remain under the cloud. Like what, a technical rebound rarely turns into a sustainable rebound when the bear run is so comfortably installed.

By dint of repeating it tirelessly, the Ethereum bear run is sinking into a stalemate, a stalemate that could become the norm throughout 2022. And it would not be the technical rebound mentioned in the game-changing article. If the first half wasn’t pretty, what about the second half looming with an alarming future Kumo in weekly units. Not to mention that cryptocurrency investors should have no illusions about a noticeable shift in central bank monetary policies.

Not only, they could be tempted to (re) pour oil under the fire by fueling inflation again. But even worse, rate hikes would not magically resolve the imbalance between supply and demand. And given the way things are going now, I fear a recession with high inflation on both sides of the Atlantic, despite an ebb.

As a result, this would not do business for risky asset classes in the immediate future, and more specifically cryptocurrencies. In a market environment under very high tension, episodes of stress are conducive to structurally high volatility. In which case, we could imagine Ethereum prices threatening the $1000 support or slipping dangerously below $700, completely wiping out the last bull run.

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