Due to a strong resistance level, the native Ethereum token, during the next sessions, will Ether (ETH), is likely to correct below $ 3,200.
In the wake of the market-wide rally, the price of Ether has risen nearly 22% over a time horizon of just one month. This pushed the second most capitalized cryptocurrency from under $ 3,000 to over $ 3,650 in the first eight days of October, triggering further bullish forecasts.
“We will quickly reach $ 6,000, $ 10,000 is on the schedule“, has highlighted the analyst Crypto Cactus on Twitter. David Gokhshtein, CEO of PAC Protocol distributed data network, also expects an upside target of $ 10,000:
“We are waiting for $ ETH to go above $ 10,000 so that the party can really get started.
Side note. The only thing I’m thinking about is: how will the #NFT market react? “
Waiting for $ ETH to cross $ 10,000 so the party can really get underway.
Side note: The only thing I’m thinking about is, how will the #NFT market react?
– David Gokhshtein (@davidgokhshtein) October 8, 2021
But the price of ETH could crash into a confluence of three notable bearish indicators, which would limit its bullish movements and reduce some of its recent gains.
Two levels of resistance and an ascending training
As shown in the graph below, the presence of a rising wedge (ascending wedge formation) and the resistances given by a descending trendline and an intermediate zone, indicate the possibility that Ether may undergo a bearish reversal.
After a sequence of higher highs and lower lows, a rising wedge was formed. Meanwhile, the cryptocurrency’s bullish trend has shown decreasing volumes, betraying a lack of bullish conviction among traders in the market.
Furthermore, the apex of the structure – the point where the two trendlines converge – is around two historical resistance zones. The first is an intermediate resistance bar, as shown in the chart above, which previously coincided with the top of ETH above $ 3,650.
At the same time, the second resistance consists of a descending trendline, most clearly visible in the daily chart below at around $ 3,800.
As a result, the apex of the rising wedge and the two resistance trendlines pose bearish reversal risks for Ether. Should this happen, Ether could collapse until the upper and lower trendline of the wedge coincides.
Related: Three factors could double the price of Ether in the fourth quarter
That is it could drive the price below $ 3,200, an area of strong accumulation for traders in the first half of September 2021.
Head and shoulders reversed in formation?
A downside to or below $ 3,200 would not necessarily lead Ether into a bearish cycle. In reverse, it could trigger a bullish setup head and shoulders reversed.
If the setup unfolds as expected, traders’ buildup of ETH will increase close to $ 3,200, causing a bounce to the neckline area shown in the chart. By doing so, the price of ETH would place the inverted head and shoulders target at a height equal to the top level between the neckline and the bottom of the pattern, equivalent to approximately $ 4,500.
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