Ethereum (ETH) – hovering near the lower bar of a descending trianglePosted on Tuesday, June 7 2022 at 9:11 pm GMT+0000
Ethereum (ETH) has been gradually declining over the last few weeks, developing in a descending triangle since the drop to a fresh 1-year low on May 12.
The descending triangle is a bearish pattern that is characterized by a descending upper trendline and a flat lower trendline that acts as support. This pattern indicates that sellers are more aggressive than buyers as the price continues to make lower highs. The pattern usually dissolves to the downside.
Additionally, the 20 and 55-day exponential moving averages are sloping downward following the price action, sponsoring the broad bearish outlook. The short-term oscillators are painting a bearish picture as the Momentum indicator is pointing south below its neutral mark, and the MACD just slipped below its zero and signal lines.
If the bears maintain control and dive the price below the triangle’s lower bar, they may pause for a breather around the 1,550 support zone, before pushing towards the 5th of March 2021 low at 1,442. Breaching this obstacle will intensify selling pressures, opening the door towards the pattern bearish target at 1,214.
On the flip side, should buyers manage to cross above the exponential moving averages and the triangle’s upper bar, they will gain confidence to propel the price higher initially towards the 31st of May high at 2,015. Next, they will push towards the 2,164 – 2,198 zone molded by the 15th of May high and the 10th of May inside swing low, before aiming for the pattern’s bullish target at 2,392.
To summarize, Ethereum is approaching the lower line of the descending triangle. A break below it will put the broad downward trend back into play, while a rally above 2,200 will upgrade the short-term outlook to bullish.