ETH recently entered a correction phase and has been trading within a descending wedge pattern for the last 2 days. However, it managed to break through its descending support line in the early morning hours in the 1-hour chart.
Ethereum recently peaked at $3,581 after a strong bull run that began in mid-March, allowing it to rally from price levels below $2,600. It has since recorded a significant price correction and was trading at $3,250 at the time of this article’s publication. Its 1-hour chart reveals that the price correction has been limited to the descending support and resistance lines forming a wedge pattern over the past 2 days.
ETH managed t break above the descending resistance in the morning, courtesy of bullish momentum that took over from the day’s low at $3,143. If the price action in the 1-day chart is still in the correction phase, the price should experience resistance at the $3,270 price level which is a previously tested support zone.
The $3,300 price level is also a good candidate for a reversal as it lines up with the 0.27 Fibonacci level from the daily high to the low. A further downward correction could place the next bullish retracement near the $3,000 price level, which has always been a support and resistance zone.
What can ETH’s technical indicators tell us about its price direction?
ETH’s 1-hour and 1-day charts reveal that the price correction kicked off after the RSI and MFI reached oversold conditions. However, the bullish retracement currently taking place reveals that it was oversold on the 1-hour chart but bounced back after hitting the RSI’s mid level (50) on the 1-day char
The IMF on the 1-day chart was still above 50 at the time of this posting while making entries on the 1-day chart, a sign that it still favors the bullish recovery. The chain side of things reveals that the net volume of transfers to exchanges fell slightly from April 4 to April 5. It has also increased significantly over the past 24 hours, reflecting the current price action of ETH.
