Bottom line: Ethereum long term structure continues to remain bullish against 89.50 lows since March 2020. Over the short term though, the crypto has managed to carve a meaningful top around 488.00 levels as bears might remain poised to drop towards 240.00/250.00 levels.
Ethereum has been trading in a contracting range between 320.00 and 400.00 since past few sessions. The crypto had earlier peaked through 488.00 before facing selling pressure. The safe haven US Dollar has broadly gained since early September as risk assets (Gold, Oil) along with global equities dropped lower. The crypto might come under renewed selling pressure over the next several weeks, if risk aversions continues.
Ethereum bears continue to remain in control as the crypto faces resistance just below 360.00 mark. It might be carving a contracting triangle since dropping towards 310.00 levels and might soon break lower towards 240.00/250.00 mark, in the next several trading sessions.
Ethereum had dropped through 89.50 lows in March 2020, before reversing sharply. The crypto had managed to produce a religious rally between 89.50 through 488.00 levels, easily taking out past resistance around 300.00 mark.
The above rally might have taken shape of an impulse wave, which should be ideally followed by a corrective wave. The drop from 488.00 through 310.00 might be seen as the beginning of the proposed corrective wave lower towards 240.00/250.00 levels respectively.
Also note that fibonacci 0.618 retracement of the entire rally between 89.50 and 488.00 is seen passing through 242.00 mark. High probability remains for a bullish turn if prices manage to push lower towards 240.00/250.00 zone.
Most traders might be preparing to hold short positions taken earlier and also willing to add around 350.00/355.00 levels, with protective stops above 488.00 and projected target towards 240.00 mark respectively. Resistance zone is also seen around 440.00/450.00 levels.
Harsh Japee, Technical Analyst.
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