Ethereum (ETH) – Developing a symmetrical trianglePosted on Monday, March 7 2022 at 9:29 pm GMT+0000
Ethereum (ETH) seesawed sharply over the last few weeks, developing a symmetrical triangle since the drop to a fresh 7-month low on January 24.
Symmetrical triangles are viewed by Traders and market analysts commonly as consolidation patterns that may forecast either the continuation of the existing trend or a trend reversal. This triangle pattern is formed as gradually ascending support lines and descending resistance lines meet up as a security’s trading range becomes increasingly smaller.
However, the 20 and 55-day exponential moving averages (EMA) are sloping downward following the price action, reinforcing the thesis for a sustained bearish outlook. The momentum oscillators are painting a bearish picture as the MOM is pointing south below its 50-neutral mark, the MACD is located in the negative zone slightly below its signal line, while the DI- and the DI+ are negatively aligned and diverging.
If the bears maintain control and dive the price below the triangle’s lower bar, the 2306-2131 support zone will act as the first line of defense, before traders shift their attention towards the 22nd of June low at 1700. Breaching this obstacle will intensify selling pressures, opening the door towards the pattern bearish target at 1053.
On the flip side, should buyers manage to cross above the exponential moving averages and the triangle’s upper bar, and more importantly tackle the most recent high at 3045, they will gain confidence to propel the price higher initially towards the 10th of February at 3285. Next, they will push towards the 3575 December low before aiming for the pattern’s bullish target at 4255.
To summarize, Ethereum is approaching the lower line of the symmetrical triangle. A break below it will put the broad downward trend back into play, while a rally above 3045 would brush away those fears.