Ether (ETH) is currently trading on the Merge level. A monthly close below this level should initiate a correction phase.
Ether (ETH): monthly close in the red?
The second month of the year is about to close. We see that ether (ETH) could form a monthly candle in the form of a doji. Generally, this is a trend changing pattern, as it signifies a decrease in upside pressure. However, this is only one possibility. Indeed, it is entirely possible that the rally at the start of the year will continue. This would allow the breakout of the August high at $2000. But given the bearish signals on bitcoin (BTC), the chance of this happening is low.
Additionally, Ether (ETH) is showing bearish signals on the daily scale. We could therefore consider a correction for the next few days. In this case, the price could close the “gap zone”. If today’s session tops higher than Monday’s, we could bet on a monthly close in the red. Thus, ether (ETH) could retrace all the way to $1400. This is the fib level 50% of the “gap zone”. If this support breaks, we can consider a descent towards $1300.
What direction will she take this week?
It’s rather risky to bet on a specific direction before today. Indeed, the price always tends to reach the high or the low of the week on Tuesday. Thus, it will be necessary to watch the movement of ether (ETH) today to determine the potential trend that it will take this week. Thus, one could go short or long, but it will depend on today’s movement.
If Ether (ETH) bottoms lower than yesterday, it will be a bullish confirmation. In this case, the price could retrace towards $1578, before starting a rise towards $1730. If this is the case, we can take a long position at $1578 with a stop that will be placed below the low of the weekend. If ether (ETH) reaches a higher high than yesterday, we can bet on a correction towards $1400. Given the RSI divergence on a daily scale, it will be more interesting to bet on a decline in price.
Entry point: $1687
Stop: $1730
Goal: $1400
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