Ethereum (ETH) is trading inside an important horizontal area that previously acted as resistance. ETH is also inside a confluence of short-term support levels that could be key in determining the future trend.
Ethereum Price Slides Towards Support Level
The daily timeframe shows that ETH has been moving inside an ascending parallel channel for the last 95 days. On January 12, the asset reached a local maximum of $2,717, testing the strength of the channel resistance line.
However, Ethereum has since fallen and is trading near the pattern’s support line. It is currently located inside an important horizontal area that previously offered resistance. A rebound from it will confirm this area as support.
The daily relative strength index (RSI) hints at continued declines. The indicator has formed a bearish divergence (green) and is below 50, which is a sign of a downward trend.
Analysts and Traders Remain Optimistic
Despite the ongoing decline, cryptocurrency traders and analysts on Platform X are optimistic about Ethereum’s prospects.
TheCryptomist believes that the rebound could be the impetus for the start of the altseason. She wrote: “Where others are scared, I am excited!! We have hit my support level from last week. Should we bounce..it is ALT SEASON”
Where others are scared, I am excited!!
We have hit my support level from last week.Perhaps smaller TF chop present here.
Should we bounce .. it is ALT SEASON 🚀😘https://t.co/EzINPs8qZ8 pic.twitter.com/fknhqqR0aq— The Cryptomist (@Thecryptomist) January 22, 2024
Meanwhile, VellaCryptoX suggests that Ethereum will rise towards $2800, and finally, MuroCrypto stated that it is holding long positions in ETH with a target of $2,700.
ETH Forecast: Is the Bottom Near?
While the daily timeframe is bearish, the four-hour chart indicates the possibility of a rebound. The chart shows that ETH has bounced off the ascending parallel channel support line, which coincides with the short-term falling wedge support. The wedge is considered a bullish pattern.
Additionally, the four-hour RSI has moved beyond the oversold zone after briefly falling below it.
If Ethereum’s price breaks out of the wedge, it could rise 8% to the channel resistance line at $2,580. This line also coincides with the Fibonacci level of 0.618.
Regarding the monthly range, nothing has changed since the last post, and the $3000 zone still has a high magnet along with $3290.
We can calmly think about such goals as long as the $2140.8 zone holds. On the pullback, we will wait for a test of $2293, where we can look for long positions in order to test the levels indicated above.
Of course, this would be the ideal plan. If Bitcoin’s pullback doesn’t have a big impact on Ethereum, keep hedges and alternative positions at the ready.
However, a breakdown of the lower border of the channel could trigger a 9% drop in ETH to the nearest support at $2,170.
