ETH USD Price Analysis: $111.00 Concerns Subdued Traders
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- Ethereum price expected to remain subdued below $126.00 level
- The $111.00 level is the major technical support area to watch
- Bearish head and shoulders pattern is weighing over the ETHUSD pair across various time frames
ETHUSD Short-term price analysis
In the short-term, the ETHUSD pair is likely to remain bearish while trading below the $126.00 level, which is a former key swing-high formed on the recent rally towards $160.00. The recent move towards the $160.00 level is now in danger of being a corrective rally from extreme oversold trading conditions, rather than the start of a meaningful trend.
The $111.00 support area is the key area to watch for further losses in the ETHUSD pair, as it represents dual support from a key trendline and also the neckline of a large head and shoulders pattern with a $50.00 downside projection.
A break below this key area and the ETHUSD pair will likely test towards at least the $80.00 level, with the actual bearish pattern suggesting a downward move could take place towards the $60.00 benchmark.
Pattern Watch
The four-hour time frame best illustrates the bearish head and shoulders pattern and how price is trading dangerously close to the key $111.00 area, alongside dual trendline support.
Key short-term Levels
111.00 support – 126.00 resistance
106.00 support – 132.00 resistance
98.00 support – 150.00 resistance
MACD
The MACD indicator on the four-hour time frame is trending lower, however the recent decline has yet to spark a definitive move lower on the MACD. Traders maybe waiting for a key technical break to the downside and MACD line crossover before definitively shorting the ETHUSD pair.
ETHUSD Medium-term price analysis
In the medium-term the ETHUSD pair is bearish while trading below the $147.50 level, as the $147.50 level represents the ETHUSD pairs 100-day moving average, and also sits close to psychologically important $150.00 level.
Price has been steadily declining since the ETHUSD pair met heavy technically selling just before the $160.00 level earlier this month. The large decline in the ETHUSD pair on January 10th was the highest volume seen for Ethereum this year on the daily time frame.
A definitive break of the $111.00 to $147.00 range is likely needed before we see a strong return of trading volume and a return of large-scale speculative participation in the ETHUSD pair.
As is apparent with Bitcoin, Ethereum is now trading at a critical juncture, where price can either recover to fresh 2019 trading highs from current levels, or crash to fresh multi-year lows.
Pattern Watch
The daily chart highlights the head and shoulders pattern formation, however, caution is still advised, as price is still making bullish higher highs.
Confirmation is now needed for the bearish head and shoulder patterns neckline to break occur and price to make new monthly lower lows.
Moving Average + Volume
Price is deviating from it’s trading range between the 50-day and 100-day moving averages, as the BTCUSD pair attempts to break below the 50-day, which indicates increasing bearish momentum.
Volume has been declining since the January 10th price drop, as illustrated by the volume indicator over a 20-day basis.
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