Ether bulls raise hopes of USD 10,000 despite bear flags in the price chart

Ether threatens to expand its sell-off to $ 3,200 this week as the recent downturn triggers a classic bearish setup.

ETH price fell more than 5.5% on December 6, to an intraday low of $ 3,913. At that point, it slipped through the upward sloping support line, forming an ascending channel that looks like a bear flag. to establish a downward trend.

ETH / USD daily frame price chart showing a bear flag | Source: TradingView

Cautious traders will often spot a bear flag when an instrument consolidates higher within a parallel channel after a significant drop in price (known as a flagpole). They predict the price will drop below the flag’s bottom trendline. And when it does happen, traders set profit targets by measuring the height of the flagpole and subtracting it from the breakout level.

Applying a bear flag strategy to ongoing price trends, it is possible that ETH will plummet to $ 3,200 in the upcoming sessions. Interestingly, this level is also close to the 0.5 Fib line ($ 3,264) on the Fib retracement plot, which was pulled from $ 720 to $ 4,808.

Need more validation

While the bear flag setup points to further declines in ether, some analysts believe it still has plenty of room for a bull run.

For example, PostyXBT, an independent market analyst, has transfer Follower attention to Ether’s December 4th low, highlighting its abrupt drop from $ 4,240 to $ 3,575, was received by traders with a positive buy reaction.

“A weekly closing price above $ 4,000 means that ether is one of the strongest coins on the market,” said PostyXBT, adding that the structure is unlikely to last “despite the wick”.

ETH / USD Weekly Perpetual Futures Chart | Source: TradingView

Meanwhile, popular analyst Crypto FOMO also cited the December 4th rally as a reason to continue the uptrend in Ether. In an analysis announced On December 6, Crypto told FOMO that Ether’s ability to hold an ascending channel support (bear flag structure) could cause the bulls to push the value down to $ 10,000.

“It’s also because ether is falling a lot less than other cryptocurrencies, which is very optimistic,” noted Crypto FOMO, highlighting the growing strength of ether over Bitcoin.

Crypto Top 10 performance against USD and BTC in the last 30 days | Source: Messari

On the weekly chart, ether appears to have risen to $ 6,500 after breaking above an ascending triangle.

Specifically, Ether price left a triangle in the week ending October 25th after consolidating within a pattern that had spanned more than four months. However, it came back to test the structure’s upper trendline for support, which is common in bullish continuation setups.

The weekly ETH / USD price chart has an ascending triangle setup | Source: TradingView

As long as the price stays above the upper trendline of the triangle, the possibility of a continuation up remains high – equal to the maximum height of the structure, as shown in the chart above.

On the other hand, a critical break below the lower trendline of the triangle risks weakening the bullish setup.

Strong foundations

CEO James Wo of the DFG Group, a Singapore-based venture capital company, has blamed the consistently positive correlation of Ether with Bitcoin for the latest price corrections and has pointed out that the sell-off on the Bitcoin spot market due to the new Covid variant FUD, Omicron, resulted in $ 2 billion in margin positions being forced into liquidation, damaging ETH.

However, James Wo also predicts that the price of Ether will rise again due to the successful launch of NFT, DeFi and Metaverse.

Top 5 DeFi Chains Based On TVL | Source: Defi Lama

“The previous Open Interest (OI) levels, this correction for both Bitcoin and Ether, is an important indicator that points to a very likely bearish scenario,” said Wo.

“I still believe the fundamentals are strong and long-term valuations remain very low given the technological advances and contributions we are seeing from this industry.”

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to Cointelegraph

Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page