The price of Ethereum (ETH) made a significant rebound last week, temporarily halting a decline that had been ongoing since April
ETH is now trading in a horizontal range of $1650-$1950. The short-term pattern suggests that Ethereum is likely to rush to the highs of the range and make a bullish breakout.
Telegram feed
.
Ethereum bounced back after selling off
Technical analysis on the weekly chart indicates volatile market sentiment on ETH. This is evidenced by the divergence in price dynamics and technical indicators.
In early April, the price seemed to have made a bullish breakout of the horizontal resistance area of $1950.
In early April the price seemed to have made a bullish breakout of the horizontal resistance area at $1950.. However, it was not viable. The following week the price fell and has been declining ever since (red circle).
The exchange rate of ETH reached a low of $1622 last week.
The ETH rate hit a low of $1622 last week and bounced back from that, confirming the $1650 horizontal area as support. The token is currently trading in a range between $1650 and $1950.
Source: TradingView
The weekly Relative Strength Index (RSI) supports a rebound, although it is at a critical level. This indicator allows traders to judge whether the market is overbought or oversold, helping them decide whether to buy or sell.
A values above 50 and an uptrend indicate the bulls still have the upper hand, and vice versa. Once the price rebounded, the RSI also bounced out of the 50 area (green circle), which is a sign of a bullish trend.
However, the indicator has not yet started an uptrend.. Thus, there is still a chance that it will fall below 50.
Has ETH completed its correction?
Daily timeframe wave analysis outlines a more pronounced bullish outlook.
The most likely wave scenario suggests that price has completed a five-wave bullish structure (white), leading to a yearly high of April 17. Since then, ETH has been declining inside a descending parallel channel.
Those channels usually contain corrective structures. Accordingly, we are most likely dealing with a corrective decline following a five-wave bullish pattern. This is also confirmed by the rebound from the 0.5 Fibo retracement level.
The bullish breakout from the June 21 channel confirmed that the correction is complete. Thus, ETH is expected to rise further to the next long-term resistance around $2500.
The trading channel breakout on June 21 confirmed that the correction is over.
Source: TradingView
Despite this bullish outlook, a decline inside the channel would invalidate the bullish scenario and signal that Ethereum is in a bearish trend. In that case, the most likely outcome would be a drop to $1200.