Technical analysis for May 04: ether (ETH) preparing for a correction?

The US inflation rate could not push the price of ETH higher. The crypto is therefore resuming its bearish run since the weekend. At this rate, there is a possibility of a monthly close in the red. Here are the levels to watch as ether (ETH) could make a descent towards $1650.

Ether (ETH) after the US inflation rate

The US consumer price index (CPI) was lower than expected (4.9%). Which caused a positive reaction for the whole crypto market. ETH saw a sharp 2.5% rise after the release. But that didn’t prevent a daily close in the red as a bearish reaction drove the price around $1795. Currently, ether (ETH) is trading around $1820, potentially setting the stage for a further descent towards $1650.

Ether descent
Ether (ETH) candlestick chart, Daily scale – source: TradingView

Indeed, its value crosses the green oblique support, but also Monday’s low at $1817. Which could be considered a bearish signal. Then, you have to remember that it was the zone between $1996 and $2059 that rejected the price over the weekend. Since then, Ether (ETH) has recorded a decline of 9.5%. This area (in gray on the chart) is between the 61.8% and 78.6% Fibonacci levels of the April range. Therefore, a descent below the April low ($1765) is possible. If this scenario holds, ETH could breach the $1686 support.

Time to sell?

Due to the current downward trend in the price of Ether (ETH), it is possible to take a short position. The price has seen a steep drop since last weekend, after hitting an area between $1996 and $2059. It would therefore be possible to take a short position at $1867 with the first objective of the low for the month of April. If Ether (ETH) continues to fall with high volatility, it could hit $1650.

Ether descent
Ether (ETH) candlestick chart, H2 scale – source: TradingView

Even if the price breaks above Wednesday’s session high ($1892), it is still worth taking a sell position around $1970. However, the bearish thesis on Ether (ETH) will only be invalidated if the $2021 level is breached.

Admission: $1867;

Stop: $1892;

Goal 1: $1765;

Goal 2: $1650.

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