Ethereum price action from January 22 to March 4 created three lower highs and higher lows, which, when connected via trend lines, resulted in a symmetrical triangle formation. This technical formation forecasts a 26% move obtained by measuring the distance between the first swing high and swing low to the breakout point.

On March 6, ETH breached below, signaling a bearish breakout, which puts the theoretical target at $1,962. A breakdown of the weekly support level at $2,541 is vital; a breakdown of this barrier will expedite the move lower.

Regardless of the recent onslaught of bearishness, Ethereum price needs to produce a daily candlestick close above $3,413 to invalidate the bullish thesis. Such a development will also open the possibility of kick-starting a potential uptrend.

Ethereum price action looks to be signaling to be in good health, but the patient itself and his underlying condition are far from good. The latest red light came from the upward rejection against the 55-day Simple Moving Average (SMA) at $2,800. With that move, bears had yet again another window to enter and push price action to the downside, as investors will refrain from engaging in full size into risk assets as the FED is due to hike rates this week.

ETH price looks technically set to first dip below $2,400 at the monthly S1 support level, breaking the low of this week. Another leg lower, for example, if the FED would come out hawkish or more negative news flow out of Ukraine, would spell out a break below $2,278.42 towards $1,928. This is because only the low of 2022 is the only element for bulls to cling on if they want to try and catch a possible falling knife, as where the area below $2,000 holds more support and puts ETH back at that distribution level than in the summer of 2021 sparked a rally of around 188%.

Relying on Hawkish Sentiments Above Deep Retracement Zone

Mar 15 2022