ETH forms a bullish pattern as it declines to $ 3,600

ETH had a rough week and it fell to $ 3,600 yesterday.

• Major support levels: $ 3,600, $ 3,300
• Key Resistors: $ 3,740, $ 4,000

ETH just hit a lower low on the chart if we exclude the December 4th flash crash, with the price hitting the $ 3,600 support and currently hovering just below the $ 3,740 resistance.

The price movement of the last few days has formed a large descending wedge (in blue). This is a bullish pattern, but it could become invalid if ETH falls below a critical level of support.

USDT Daily Chart | Source: TradingView

Technical indicators

Volume: The high volume during the sell-off was one of the reasons for the price decline. Buying pressure looks weak today and is unlikely to drive the price above current levels (blue).

RSI: The 4 hour RSI has entered the oversold area (<30) and as a result the price has risen from $ 3,600. On the daily timeframe, the RSI has made a lower low, suggesting that the trend is bearish.

MACD: The daily MACD formed a bearish cross yesterday which is not good for the bulls. The only positive aspect is that its histogram has hit a higher low (bullish divergence) since November when the correction started. This could suggest that this downtrend could end in January.

ETH / USDT Daily Chart | Source: TradingView

Perspectives

The trend at ETH is downward. This trend will stay intact until ETH hits a higher high.

Short term price forecast

The current price action looks pretty interesting because if price breaks above the descending wedge then ETH will skyrocket in January, making this correction (November to January) pretty much the correction we saw from May to July 2021 similarly, if the price breaks out and the day candle closes below the wedge, it is invalid.

You can see the ETH price here.

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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.

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