Ethereum is considering a short-term correction after a bearish cross on the MACD and a double top along the RSI. With the EMA Ribbons still flashing a healthy position, ETH had plenty of defensive resources at its disposal. Once the selling pressure is released, expect ETH to move up towards the $ 5,000 mark. At the time of this writing, ETH was trading at $ 4,605, down 0.2% in the past 24 hours.
Ethereum Daily Chart
Ethereum was approaching its short-term defense at 78.6% Fibonacci extension after capital outflows continued to be seen in the broader market. Now the aforementioned support was bolstered with the daily 20-SMA (red) which added an extra cushion. If sellers were to burst below this confluence, the 50-SMA (yellow) and 61.8% Fibonacci level would lend a helping hand.
As per the nature of ETH’s daily EMA Ribbons, the alt was well within an uptrend and large sell-off’s are unlikely in such a situation. The last time these bands were reversed was during the May crypto crash. During the next bull cycle, ETH would give way to earlier targets of $ 5,018 and $ 6,038.
Reasoning
The RSI has formed two tops within the overbought territory and has moved south over the last five days. The index could continue on its path before finding support around the midline. As mentioned earlier, the MACD flashed a sell signal after registering a bearish crossover. The DMI was also close to an unfavorable crossover, which could generate further short-term selling pressure.
Conclusion
Ethereum faced near-term woes, but its long-term trajectory was backed by the EMA Ribbons’ bullish nature. Therefore, expect ETH to rebound off the 78.6% Fibonacci and make its way towards the $ 5,000 mark. In case ETH does slip below $4,463, another defensive option was available at the 61.8% Fibonacci level.
