Ethereum’s rapid hurrah towards $400 is quickly becoming a price point of concern for its supporters. After Ethereum clocked in above the range of 1st August, ETH bulls were deliriously delighted. They hoped that this is the beginning of Ethereum’s long-awaited bullish rally which will take them above the elusive $1000 price again. The sentiment dropped down quite a notch since the 1st day of the month.
Ethereum daily chart
At the time of writing, Ethereum’s value has maintained a close trading range, encapsulated under an ascending channel pattern. The problem with the above pattern is that it carries bearish implications for the future. As Ethereum appears to struggle under the $400 range, a legitimate argument can be made that the asset made has reached a dead-end for the time being. Moving Average is maintaining an active support but the bullish momentum is slowly tapering down.
Sellers can be expected to come back anytime at the moment as the Relative Strength Index might move from a position of strength to a position of weakness very fast. MACD also suggested that a possible trend reversal should be expected as the orange line appeared to enter a cross-over with the blue line.
However, the concerns were not over yet.
Ethereum’s 4-hour chart did not paint a pretty picture either as the coin appeared to exhibit a rising wedge pattern. A bearish pullback is usually expected from such situations and a drop down to $381 cannot be taken out of consideration.
In the meantime, the dropping trade volume is the biggest red-flag. With the price rise over the past week, Ethereum’s trade volume has continued to dip, indicating the creation of a bearish divergence. Now, such market conditions lead to weak rallies on top and eventually resulting in a massive price drop towards the bottom.
Ethereum’s $400 is weakening, according to Expert
Now, with the above data condoning towards a bearish forecast, not everyone was buying into the negative perspective. For popular crypto trader, Michael Van Poppe, ETH’s resistance at $400 appeared to weaken over the past week.
Well, closed my short at break.
Let's see how this plays out.
Held the crucial support level & flipped the intermediate level for support + attacking the resistance.
Break of resistance = leading towards new highs, I'd assume. pic.twitter.com/AmJpiu40WK
— Crypto Michaël (@CryptoMichNL) August 5, 2020
With Poppe expecting new highs in the market, it will be interesting how the market turns out over the next couple of weeks. For Ethereum bulls, another rally above $400, and eventually crossing $500 will be huge. However, if the largest altcoin is hit with another strong period of correction, the bull run could be over for Ethereum for the quarter.