Ethereum price seems to be displaying indications of increasing compression as it trades in a tight range, which means that there could be an impending breakout once ETH breaks the resistance level.
At the time of writing, ETH is trading at $1,935.55, up 1.14% over the last 24 hours. Ethereum has a 24-hour trading volume of approximately $9.36 billion and a market capitalization of $231.92 billion.
Ethereum Price Forms Bullish Pennant
On August 19, crypto analyst BLANK highlighted the sideways trend of Ethereum price over the previous month, indicating that the trend might be more meaningful than expected at first glance. Even though Ethereum remains relatively range-bound, the range of its swings has been getting smaller and smaller.
This pattern is similar to the bullish pennant formation, which usually follows some period of consolidation and indicates a possible further upward trend upon the break of resistance.
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Ethereum Price Tests Key Resistance
ETH is presently near the top of the Bollinger Bands, which is currently at $1,932.40. The middle band is located at $1,888.13, while the bottom band is found at $1,843.86.
This technical picture makes $1,932 significant in the near term for ETH. If a break occurs above this level, it will be a further step towards a more bullish trend with the possibility of higher prices. Otherwise, a reversal might take the price to the middle Bollinger Band of $1,888.
The MACD technical indicator continues to be marginally positive as well. The MACD line stands at 12.43300 while the signal line stands at 12.19594, making the MACD bullish. The small spread between the two lines indicates that the momentum has not built up.
This implies that Ethereum is nearing an important turning point. A divergence in the MACD lines together with a breakout above $1,932 would confirm the bullish scenario, while a drop below $1,888 coupled with weak momentum would suggest consolidation.
What Happens Next for Ethereum Price?
The $1,932-$1,950 zone has now become one of the most critical zones to watch out for. Any break and move above this level may give impetus to the bullish pennant formation and focus on higher levels of resistance.
Any breakout followed by a test will be considered further evidence that the previous resistance is now turning into support. Otherwise, continuous failure at this level may continue the existing range for ETH.
Unfortunately, $1,888 is a vital short-term level according to the middle Bollinger Band. If the price declines further, then the $1,844 area may attract attention, being around the lower Bollinger Band.
In conclusion, for those who are involved in trading or investing in Ethereum, it is worth noting that Ethereum is on the verge of making an important technical choice and not yet showing signs of a breakout.
The next big action might be based on whether Ethereum price will be able to create support at the $1,932-$1,950 level. Only after this event becomes reality will the bullish pennant formation become a breakthrough one.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
