Ethereum price certainly looked like a prime shorting opportunity during the beginning of the week. Questionable strength of the $2,500 support level brought in a large number of new short-sellers.

The resulting price action from Thursday’s sell-off generated a massive 20% rally that has extended into Friday’s session. Bulls are attempting to push Ethereum price to a close above the Ichimoku Cloud, where ETH opened the current weekly candlestick.

If bulls complete a close above the Ichimoku Cloud, Ethereum price will likely target the next resistance level, the weekly Tenkan-Sen at $3,700. However, downside risks remain – this is especially true with average weekend volatility and the Russian invasion coinciding.

A close below the weekly Ichimoku Cloud at or below $2,325 would complete an Ideal Bearish Ichimoku Breakout on the weekly chart – this would likely initiate a swift crash down to the $1,800 value area, invalidating any near-term bullish outlook.

Anoter technical perspective shows that Ethereum price has fallen below the rising wedge on the 12-hour chart on February 18, putting a 28% drop toward $2,055 on the radar.

Ethereum price slumped to a swing low of $2,301 on February 24 and recovered by 13% following US President Joe Biden’s announcement of new sanctions on Russia.

However, the Arms Index (TRIN) which gauges overall investor sentiment suggests that there are still more sellers in the market than buyers.

The first line of defense for the buyers will appear at the 61.8% Fibonacci retracement level at $2,615, then at the 78.6% Fibonacci retracement level at $2,398.

Ethereum price may slump lower toward the January 22 low at $2,300 before eventually reaching the January 24 low at $2,160.

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