As you can see ETH has been trading inside of this rising channel since the beginning of May. Rising channels favor a break to the downside, I've also highlighted some bearish divergence on the RSI which also points to a move down. The orange lines are long term weekly trend lines. The bottom orange line connects the 2022 lows through to the April lows, if price breaks down, expect a retest of the underside of the channel before moving down to the orange line around $1435. This would only be the third hit and third hits rarely breakdown. If it defies logic and breaks out above, look for it to move up to the top orange line around $3600, which connects the 2021 bull market highs through the march 24', May 24' and December 24' highs. If it comes into this area, it would be a 5th hit of a major weekly trendline, 5th hits have a very high probability of breaking out to the upside, if this happens it would be very bullish. In this scenario I would expect ETH to come down and test the top of said trendline as support before moving to new all-time highs. A Fibonacci retracement from the 2020 lows to the 2021 highs would put new price targets at $6,670 at the -0.382 as well as $7,800 at the -0.618.
Trade active
ETH has now broken down below the channel as anticipated. If we get a daily close below the channel, look for ETH to come back up over the weekend and test the underside of the channel as resistance and get rejected, it may even form another bear flag below the channel for the next few days but eventually ETH should come down to test the orange line as support. This would be a roughly 42% fall from current levels. If the orange line fails I have a secondary weekly trendline also in orange just below the first one, this would be a secondary area of support. I anticipate ETH to bottom in between the 2 orange lines.
Note
The situation with Iran has gotten worse and the US has dropped bombs, as a result, ETH is not challenging the underside of the channel as resistance and is instead coming down into my support area which is the take profit zone. My charts predicted there was going to be bad news once ETH broke down out of the channel. News never predicts charts, charts always predict the news.
Trade closed: stop reached
Breakdown failed, ETH is back in the channel. Closing the trade, ETH should see a big move up because failed breakdowns often result in big moves in the opposite direction
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.