In my previous article I were expecting that the second-largest cryptocurrency will hold the support above the trendline that was started on 19th July 2020 on the . The price action also found resistance above this support, therefore I was expecting that a perfect will be formed from this point. But unfortunately Ethereum followed the move of the Bitcoin and broke down the support of this expected up-channel. I have also play the indicator on this chart that is showing a lot of sell has entered in the market.
The price action rejected by next resistance level:
Now if we switch to the 4 day chart then different levels can be seen. As in my previous article I told you if the price action will breakout the $500 then there is no significant resistance between the $500 to $800.Therefore after breaking out this we can expect a very rapid move up to $800 resistance. But unfortunately the price action went very close to the $500 resistance and moved down. Now it has even broken down the $400 support. At this time it is re-testing the previous supports of $350 and $325 at the same time.
The priceline may re-test the SMAs as support before the next rally:
Now I would like to show you the different simple moving averages with the time period of 25, 50, 100 and 200 on the . At the moment priceline of Ethereum coin has broken down the 25 and the 50 and it is above the supports of 100 and 200 simple moving averages. Now we can expect if the price action won’t bounce from the 100 then it can move down to the next support of 200 that is at $244 at the time of writing.
And if we switch to the long term weekly chart then there is another possibility that the price action will retest the 200 before the next rally to the upside. We can also see that the 25 is continuously moving up to form a bull cross with 200 . And for the people who don't know I would like to tell them that whenever the smaller time period moving average crosses up the bigger time period moving average that is considered as a strong buying signal and a rally to the upside can be started. After 25 , the 50 is also moving towards 200 and when the 50 will cross up the 200 that will be a real golden cross and a strong signal on the long term.
The priceline may not re-test the cloud:
Now if we place the on the same long-term weekly chart then we have already seen that the price action has broken out the cloud and the has given strong signals.
Now the price line is moving down towards the cloud. But I am not expecting as that much powerful rally that it will re-test the cloud as support, because we have the strong supports of the simple moving averages on the daily and the weekly chart as discussed above. Therefore there is a strong possibility that priceline will start the next rally to the upside without touching this cloud.
We have witnessed several correction rallies on the while the move of Ethereum . But correction on the long-term chart was still due that is happening at the moment. Therefore this correction was required for the next move to the upside once this correction will be ended then we can expect a powerful rally.