The weekly timeframe readings are decidedly bearish, but the daily chart signals indicate that a rebound in the ETH price may be imminent.
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A growth attempt has been replaced by a decline
According to the results of the technical analysis of the weekly chart, the picture on Ethereum (ETH) is bearish. This is primarily indicated by the price deviation (red circle) and subsequent decline below the $1950 resistance level.
This means that buyers failed to sustain the upward momentum, making the bullish breakout of the $1950 threshold a false one. Such a deviation is usually associated with significant downward movements in the market.
Price momentum reinforces this bearish trend, having confirmed the $1950 level as resistance in early July (red icon). As a result, a bearish candle has formed on the chart.
If this downward trajectory continues, a long-standing upward support line that has been in place on the chart since June 2022 will come into play at the $1450 level. A decline to this level would be equivalent to an 18% drop in ETH.
A decline to this level would be equivalent to an 18% drop in ETH.
Source: TradingView
Despite the bearish price momentum, the weekly Relative Strength Index (RSI) is showing a slightly bullish bias. This momentum indicator is currently just above the 50 mark without showing a clearly defined vector of movement. This points to a neutral trend, but the fact that the indicator remains above 50 tilts the scales a bit toward a bullish bias.
ETH outlook: rebound or bearish breakout?
While the weekly timeframe is colored in bearish tones, the daily chart reflects a mostly neutral picture. Since December 2022, the price has been following along the short-term ascending support line. Price has tested this line for strength many times, most recently on June 15 (green icon). The rebound also reaffirmed the $1650 area as support.
The ETH price is now approaching the ascending support line again. A rebound from it or its bearish breakdown will be crucial in determining the further direction of the trend. A bounce could send the token up 9% to the $2000 resistance level, while a breakdown is likely to send it down 11% to the $1650 support level.
A strong close above this level is very close to the long-term resistance of $1950.
Since this level is very close to long-term resistance at $1950, a decisive close above it would be required to confirm a bullish trend reversal.
Source: TradingView
Hence, the future outlook will be determined by whether ETH bounces off the rising support line or breaks it. A rebound is likely to lead to another test of the $2000 resistance area, while a bearish breakout could see the price fall to $1650.
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