Ethereum's Bearish U-Turn? ETH price momentum fades after $1.6K rejection
Categories: Crypto News US
Ethereum's Bearish U-Turn? ETH price momentum fades after $1.6K rejection
Ethereum's native token Ether (ETH) fell on July 26, reducing hopes of an extended price recovery. The ETH/USD pair declined by about 5%, followed by a minor rebound and exceeded $1,550. The see-saw action also revealed an underlying bias conflict among traders who are caught between two very contrasting market fundamentals. The first is the excitement surrounding Ethereum's possible transition to proof-of-stake in September, which has helped the Ether price recover 45% month-to-date.
However, this bullish hype is accompanied by macroeconomic headwinds, namely the hawkish stance of the Federal Reserve and the European Central Bank, which put pressure on riskier assets and saw the Ether price fall 68% from its all-time high of $4,950. But the short term could provide some upside for the ETH price. For example, analyst PostyXBT expects Ether to undergo an interim upside retracement based on the coin's recent swings within an ascending channel pattern, as shown below.
Nevertheless, seeing the same recovery trend in conjunction with Ether's four-hour relative strength index (RSI), a momentum oscillator indicator, shows extreme disparities. Interestingly, Ether price has been making higher highs since July 18, while its RSI is simultaneously making lower highs. This shows a bearish divergence between the price and momentum of ETH, which means that the bulls are losing their grip on the market, and a downtrend could follow.
Ether also risks breaking below the lower trendline of its ascending channel, which coincides with two further price supports: the 50-4H exponential moving average (50-4H EMA; red wave) around $1,500 and the 0.5 Fib line at $ Near 1,475. Losing these key supports is likely to drop below $1,350 ($0.382 Fibonacci line and blue 200-4H EMA wave) in August, which is 10%-15% below today's price, if this bearish scenario emerges.