Ethereum’s price has moved down for five consecutive days this week, breaking below two key moving averages. While this move down from its $1420 high is bearish on the short term, it’s always worth looking at the bigger picture.
Last year Ethereum’s price retraced strongly from its 12th June high, but this move was just part of a 5-month consolidation pattern before its price finally had a breakout higher. We could have a similar situation this year.
Let’s take a look at Ethereum technical analysis on multiple time-frames, and see what the charts are telling us:
ETH/USD – Weekly Chart
Ethereum’s price has broken down through its 20-week simple moving average (SMA). The 20-week SMA has been a strong area of support historically, so if the price cannot get back above it soon, it shows a bearish change in Ethereum’s price behavior.
If Ethereum continues lower, the 40-week SMA is the next likely area of support. Of course, if the price hits support, it does not guarantee that it won’t go lower after that. However, there may be some opportunities for day and swing traders – those with short positions may take some profit.
ETH/USD – Daily Chart
The 100-day SMA had been an area of support recently as you can see marked on the daily chart analysis. However, this support has now been lost, and Ethereum continues its move lower. If Ethereum starts to move higher again, the 100-day SMA may become resistance.
The price looks to be heading towards its 200-day SMA, which is a likely area of support. If price were to break down below the 200-day SMA and stay below it, this would be a very bearish scenario.
The volume has been very low recently which indicates there is not lots of heavy selling. Ethereum may just be consolidating after its massive price increase over the last year or so. However, it must be noted that the chart only shows the volume from the Coinbase exchange, and heavy selling could be going on elsewhere.
ETH/USD – 4-Hour Chart
The 4-hour chart shows clearly how Ethereum’s price has moved down in a pattern of lower lows and lower highs. The previous low is a possible area of support. If price breaks below this low it shows a continuation of this pattern and downtrend.
Key areas to watch:
- 200-day & 40-week SMA – Areas of potential support. Bearish if the price moves and stays below.
- 100-day SMA – Area of potential resistance if the price starts moving higher.
- Lower lows and lower highs – Keep an eye on this pattern and look for signs it’s changing.
- Volume – Low volume could indicate Ethereum is consolidating.
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