Ethereum (ETH) Generates Bullish Divergence Despite Bearish Price Action

Since breaking down from a long-term consolidation pattern, Ethereum (ETH) has struggled to sustain an upward movement and create a bullish structure.

ETH has been falling since reaching an all-time high price of $4,868 in Nov. After bouncing this Jan, the price created a lower high in March (red icon) and has been falling at an accelerated rate since. 

The downward movement has so far led to a low of $1,700 on May 12. 

An important development is that the price has broken down from an ascending parallel channel which had previously been in place since May 2021. A breakdown from such a long-term structure could cause a similarly long-term drop.

Furthermore, the RSI has decreased below 50, in what is considered a sign of a bearish trend.

Mixed readings

The daily chart provides a mixed outlook. On May 8, the price broke down from a descending parallel channel. 

Afterward, it validated it as resistance twice, more specifically on May 31 and June 7 (red icons). 

However, the RSI has generated a bullish divergence (green line), whose trendline is still intact. 

So, while the price action is bearish, the readings from the RSI are bullish. 

A closer look at the six-hour time frame shows that ETH is trading inside a symmetrical triangle. While this is considered a neutral pattern, it is occuring after a downward movement. 

As a result, it is possible that it will lead to the continuation of the downward movement.

ETH wave count analysis

Cryptocurrency trader @TheTradingHubb tweeted a chart of ETH, stating that the price could soon complete wave A of a long-term A-B-C correction.

While this is a possibility, it is not yet certain of the A wave is complete. 

If the short-term A:C (white) waves have a 1:1 ratio, this would lead to a low of $876 prior to the reversal. 

Furthermore, the exact shape of the ensuing retracement is not yet determined.

For Be[in]Crypto’s latest bitcoin (BTC) analysisclick here

The post Ethereum (ETH) Generates Bullish Divergence Despite Bearish Price Action appeared first on BeInCrypto.

Earning Passive Income With Crypto

Related Posts

Mercado Pago Extends Its Cryptocurrency Services in Brazil

Mercado Pago, the digital payments company related to Mercadolibre, has recently announced the extension of the crypto services that it provides to users in Brazil. The company…

Bitcoin Miners Bail out as Energy Prices Soar and Profitability Plunges

More and more Bitcoin miners are throwing in the towel amid soaring energy prices and plunging profitability. This has had a knock-on effect on hash rates and…

Cantina Royale Taps Elrond Apes to Boost In-game Cross Chain NFT Collections

Cantina Royale and Elrond Apes are teaming up to enhance the appeal of the upcoming top-down tactical arcade shooter with play-to-earn mechanics. Elrond Apes NFTs will be…

Bitcoin (BTC) Attempts to Create Higher Low Above $20,000

Bitcoin (BTC) is attempting to find support and create a higher low after a breakout from a short-term resistance line. BTC has been decreasing underneath a descending…

Axie Infinity’s Ronin Bridge Relaunches Following March Hack

The Ronin Bridge is open and ready for deposits and withdrawals after it suffered a major security breach in March. The network said the decision to open the bridge…

China Blockchain Alliance Executives: Virtual Currency the ‘Largest Ponzi Scheme in Human History’

The chairman of China’s Blockchain Service Network (BSN) Development Alliance Shan Zhiguang, and his colleague, insisted in a recently published op-ed that virtual currency is “undoubtedly the…