Ethereum Ends Week 13% Down But ETH Bulls Are Ready To Take Over
- The price of Ethereum has fallen 21% over the past two weeks.
- A key fall below a bullish continuation pattern generated further short positions.
- Oscillator values support a significant rebound and the rejection of any new selling pressure.
The price of Ethereum has created conditions that many short sellers have plunged into to push ETH down. The bears are convinced of a new bear market. However, maybe they just played the bulls’ game.
Ethereum price set to begin short squeeze that could rally Ethereum to new all-time highs
Ethereum’s collapse to close the weekly chart with double-digit percentage losses ended near a major support area. The 38.2% Fibonacci retracement, weekly Kijun-Sen and a high volume node in the volume profile share the $ 3,100 to $ 3,350 value area.
The most essential technical information of the weekly Ichimoku weekly chart is the spread between the oscillating structure of the candlestick and the composite index. The price of Ethereum has a series of higher lows while the Composite Index has lows – in fact, the Composite Index just hit a low not seen since September 2019. This behavior has created a hidden bullish divergence.
ETH / USD Weekly Ichimoku Chart
The hidden bullish divergence is a warning that the current corrective move is about to end and that a resumption of the uptrend is likely to continue soon. As a result, a trade opportunity is now present on the Point and Figure chart.
There is a long theoretical entry for Ethereum on its $ 100/3-box reversal points and numbers chart. The long setup is a buy stop order at $ 3,500, a stop loss order at $ 3,100 and a profit target at $ 5,500. Theoretical long trade is a 5: 1 risk / reward setup with a projected profit target of over 60% from the entry. A three-box trailing stop would help protect any profit generated after hitting the entry.
ETH / USD $ 100/3 boxes Table of reversal points and numbers
There is no invalidation point for the Ethereum price in its theoretical long configuration. If Ethereum goes down, the buy stop and stop loss move with the price action lower, but the profit target remains the same.