As a seasoned researcher with years of experience in the cryptocurrency market, I find myself constantly intrigued by the ever-evolving dynamics of Ethereum. The current technical setup presents an interesting conundrum: an inverted head and shoulders pattern on the daily chart hinting at a potential bullish reversal, while the 4-hour chart shows a double-bottom formation suggesting a short-term bullish trend.

Currently, Ethereum appears to be at a significant juncture. A potential “inverted head and shoulders” formation is emerging on its daily chart, while a “double-bottom” pattern is taking shape on the 4-hour chart. These patterns suggest there might be a slight shift towards a bullish trend.

As an analyst, I’ll be keeping a close eye on the significant levels at $2.7K for potential resistance and $2.1K for possible support. A breach above or below these levels could provide insights into the upcoming trend movement.

Technical Analysis

By Shayan

The Daily Chart

Currently, Ethereum appears to be in a downward consolidation stage, showing no definite trend indication as of late. Yet, it’s worth noting that a significant reversal pattern known as an “inverted head and shoulders” has materialized around the $2.1K support level, which is crucial because market participants have successfully defended this area so far.

This pattern often indicates a potential change in direction, pointing towards an increase in positive trends. If Ethereum manages to surpass the resistance level at approximately $2,700, it could be a sign of an impending upward trend.

Ethereum has roughly reclaimed the midpoint of the multi-month channel, which lies around $2.5K. If this breakout turns out to be valid, buyers’ next focus will shift to the neckline of the inverted head-and-shoulders pattern at $2.7K. A breakthrough at this level could solidify a bullish reversal, potentially targeting the $3K resistance zone in the near term.

The 4-Hour Chart

On the 4-hour chart, sellers of Ethereum have found it tough to drive the price beneath the lower limit of the ascending flag pattern around $2.3K. This level has proven to be a robust support, having been tested several times. If this level is broken, it could lead to a fast drop in price towards the $2.1K support zone. However, Ethereum has also displayed a double-bottom formation on this timeframe, usually indicating a short-term bullish turnaround.

At present, Ethereum’s price is sandwiched between two key levels: the lower boundary set by the ascending flag’s support and an upper limit defined by a significant resistance zone. This resistance zone stretches from the 0.5 Fibonacci level at approximately $2.6K to the 0.618 Fibonacci level at about $2.8K. It is expected that Ethereum will continue its consolidation within this narrow range until a clear breakout, either upwards or downwards, takes place.

Onchain Analysis

By Shayan

At the moment, Ethereum is stuck in a price band spanning from approximately $2,100 to $2,700. A closer examination of the Binance liquidation map reveals critical areas of liquidity that may impact an upcoming breakout. This heatmap shows areas with high concentrations of liquidity, including stop-loss orders and liquidation levels. These regions are primarily influenced by larger market players, such as whales.

The digital currency is experiencing a relatively stable phase, showing little price fluctuation due to a balance between those buying and selling. On one side, the $2K level is strongly protected by large investors (whales) and institutional traders, indicated by substantial pools of liquidity in this region. Conversely, the $2.8K level poses a tough challenge because it contains a large amount of liquidity, acting as a formidable barrier for further price increase.

This high concentration of liquidity implies that numerous traders, particularly larger ones, have set their sell-off thresholds near this price range, making it crucial. A break above or below this level might initiate a wave of liquidations, causing a chain reaction of stop-loss orders and additional liquidations which could magnify the existing trend.

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2024-10-14 15:48