ETH is currently consolidating in a horizontal range between $1650 and $1950. Given the current short-term picture and price dynamics, it is more likely that Ethereum will continue to move towards the upper boundary of this range and eventually break through it.
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As the results of technical analysis of the weekly chart show, technical indicators and price dynamics provide conflicting signals with a slight bias in favor of bullish sentiment.
In early April it might have looked like it broke through $1,950 resistance.. However, this bullish breakthrough proved untenable. The very next week the price dropped and has been declining ever since (red circle).
The following week, ETH hit a low of $1622 but then rebounded to confirm the horizontal area of $1650 as support.
Two weeks ago, ETH hit a low of $1622, but then rebounded (green icon), confirming the $1650 horizontal area as a support level. The price is currently trading in the $1650 to $1950 range.
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Source: TradingView
The Weekly Relative Strength Index (RSI) is used by traders to assess market conditions. An RSI value above 50 and an uptrend indicate a favorable situation for the bulls, while a value below 50 indicates the opposite. This metric now supports the rebound, although it is currently at a critical level.
When the ETH price rebounded, the RSI also rebounded to the 50 line (highlighted by the green circle). This signals a bullish trend. However, it is important to note that the RSI is still very close to the 50. Consequently, there is still a possibility that it could fall below it, indicating the potential for a market decline.
The launch of the Ordinals counterpart
ETH forecast: wave analysis promises a new yearly high
Wave analysis of the shorter-term daily timeframe gives an optimistic outlook for the price of Ethereum.
The most likely scenario is that price completed the first wave of a five-wave bullish structure (white) that culminated in a one-year high set on April 17. After that, the price entered a descending parallel channel.
As a rule, such channels contain corrective patterns. The W-X-Y pattern (black) supports the correction.
This forecast is also supported by the price rebound to the 0.5 Fibonacci retracement level, which serves as support for the market.
The bullish breakout from the June 21 channel confirmed the end of the correction. Consequently, the price of ETH is now expected to rise further to the next long-term resistance level around $2500. This is probably part of a long-term third wave.
Source: TradingView
In spite of this optimistic forecast, if the price falls inside the channel again, it would cancel the bullish wave scenario and determine a bearish trend for ETH.
In such a scenario, the most likely outcome would be a price decline towards $1200.