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- Ethereum price declined by more than 10% on Tuesday following heavy sell-offs led by Bitcoin
- Analysts deemed that the next support line to keep an eye on if the exponential moving average is broken is somewhere about $3,700
- According to analysts, the ascending trendline comes as a part of a rising wedge
- ETH has the potential to drop below $3k, that is based on the rising wedge setup
- If the bearish reversal setup offset is brought forth by the rising wedge pattern, the price of ETH will move at around $6,500 by the end of this year
Ethereum price has given more gains to its investors in comparison to Bitcoin since the beginning of this year. The second most famous cryptocurrency has achieved a new all-time high earlier this year, above the price level of $4.8k. However, after the asset achieved a new high, its price plunged below support levels. On Tuesday, we witnessed an increment in sell-off, which boosted the chance of ETH falling below $4k. At press time, the cryptocurrency is trading at the price level of $4,213. However, analysts deemed that a potential price decline would mark it’s return to its ascending channel support.
Ethereum price faces market correction
Ethereum price declined by more than 10% on Tuesday following heavy sell-offs. According to analysts, the ongoing market correction was led by Bitcoin. However, the second largest digital currency in terms of market cap as per CoinMarketCap dropped below its fourth-quarter upward trendline support. Moreover, the ETH also tested its 50-day EMA as its new price floor before bouncing back to higher levels. Following the performance of the asset, analysts deemed that the next support line to keep an eye on if the exponential moving average is broken is somewhere about $3,700.
Will ETH face further declines?
According to analysts, the ascending trendline comes as a part of a rising wedge. Notably, a rising wedge is a technical pattern that is treated as a bearish reversal signal by several analysts. Such patterns only appear as the price fluctuates inside a range that is defined by two converging, rising trendlines. Indeed, the analysts confirmed such breakout, after the Ethereum price broke below the lower trendline. Meanwhile, such calls are also observed if the price break is accompanied by a rise in trading volumes.
In the current scenario, the analysts are typically eyeing the run down towards the price level at a length equal to the widest distance between the wedge’s trend. Ultimately, ETH has the potential to drop below $3k, that is based on the rising wedge setup.
Ethereum’s performance would remove weak hands
Ethereum price is retesting ascending triangle resistance as support. If the bearish reversal setup offset is brought forth by the rising wedge pattern, the price of ETH will move at around $6,500 by the end of this year. Indeed, the bullish set-up will emerge if the ETH price retests the triangle’s resistance level as support days after breaking above it. However, such a move would thorough out some weak hands from the and will create an opportunity for traders to have a long-term uptrend outlook, that is based on the strong underlying fundamentals.
Thus, Ethereum price pullback may end up exhausting as the coin reaches the triangle resistance below $4k. And if a rebound follows, the price could boom to $6,500.
