After collapsing below $240 on 14 July, Ethereum faced a massive landslide on 16 July, as the price dropped below $233. It was a collective decline, spearheaded by Bitcoin after the Twitter news wreaked havoc on the largest asset market.
However, alongside BTC, Ether has performed admirably well to recover in the charts, and in the past 24 hours, the largest altcoin has climbed to $240 for its immediate resistance.
The current valuation of $243 seemed to be exciting for ETH users, but the market may move toward another bearish setback. At the time of the press, Ethereum had a market cap of $27.26 billion with a trading volume of $6.19 billion over the past day.
Ethereum 4-hour chart
The above 4-hour Ethereum chart illustrated two different situations that may provide further insight into the future trend. The recent bearish pullback on 16 July, which occurred at the back of Bitcoin’s decline, was, in fact, predominantly due to the formation of a descending triangle. The price broke out from the pattern of the 16th, which led to the depreciation of $229 below the support.
Now, the asset has sustained an immediate rally, but looking at the volume of trading, it was a mere reaction to a sudden decline, and the price hike over the past 24 hours may not be as strong as we think.
Further, the price ascended from an ascending broadening channel, which should have attained another bearish pullback. Therefore, the recent hike was a fakeout or fake-breakout as popularly termed in the industry.
At the time of writing, Ethereum continued to a maintained position above $240 but it is likely to be a temporary position since the rally before the price hike was extremely weak.
A drop below $240 should prevail in the next few days as the asset continued to attain correction.
Market Indicators further validate the imminent bearish pullback for Ether. MACD line and the signal line were fast approaching a trend reversal which would tip the market in favor of the bears.
Relative Strength or RSI also exhibited a similar decline with the selling pressure steadily increasing in the charts. In fairness, buyers continued to have an upper-hand but they are slowly losing the plot to the sellers.
After its recent surge, Ethereum is likely to attain a position under $240 again by the end of July.