Ethereum price has set up equal highs at $1,679 after failing to push through it. As a result of the buy-stop liquidity resting above this hurdle, there is a likelihood that ETH market makers will push the altcoin higher before triggering a massive selling spree.

The bearish outlook will compound if Ethereum price breaks the bullish market structure by producing a lower low below $1,515. This move will shift the odds in the bears’ favor and kick-start a sell-off that will likely knock ETH down to two key levels - $1,429 and $1,331.

Ethereum price rallied 41% in the first three weeks of 2023 and the midpoint of this ascent is $1,429, hinting that a mean reversion play could be opening up for short-sellers. If the selling pressure continues to build up ETH could slice through $1,429 and reach the next support level at $1,331.

Further adding credence to the bearish outlook for Ethereum price is the Relative Strength Index, which has developed a bearish divergence. This technical formation hints that ETH is likely to collapse due to the declining momentum but rising prices.

Regardless of this pessimistic outlook, bears should be wary of a liquidity run that could trigger a sweep of the equal highs formed at $1,679. If this move is followed by a spike in selling pressure that triggers  Ethereum price to flip the aforementioned level into a support floor, it would not only produce a higher high but also favor sidelined buyers to step in.

Such a move from Ethereum price would invalidate the bearish outlook and potentially trigger a swift move to $1,820 and 2,013 hurdles.

Ethereum to display a strong reversal after pullback

Jan 27 2023