As anticipated by a previous article, Ethereum (ETH) glimpsed a setback near its Point of Control (POC) after breaking down from the rising wedge (white, dashed).
From now on, itGiven the structure of the market, the alt king would likely continue its low volatility phase near its POC. At press time, ETH was trading at $3051.1.
ETH Daily Chart
Since the altcoin brushed shoulders with its six-month low in late January, the buyers made their stance visibly clear by propelling higher peaks and troughs on ETH’s daily chart. After obliging to its past inclinations, the crypto picked itself up from the 13-month trendline support (yellow, dashed).
As this rally stalled at the $3,500 level, ETH saw a notable correction after a monthly rise of nearly 45.5% from its mid-March lows. After the recent decline, the $2,996 level has been a vital area of value after its POC, providing high liquidity.
It is doubtful whether ETH would be able to sustain another bull run without an extended squeeze phase near the POC range. Furthermore, the southbound 20 EMA (red) fell below the 200 EMA (green) as the bears reignited bearish tendencies. Should the buyers prevent a bearish crossover of the 20/50 EMA, ETH buyers could aim to gather thrust to snap the $3,100-resistance.
Rationale
The declining trend in RSI press time supported a bearish narrative. With a descending channel path, buyers might expect a reversal from its immediate trendline support. A possible recovery of this index could reinforce a decline in sales in the short term.
With the CMF paving its southward route, the money volumes into the crypto’s ecosystem took a significant plunge over the last two weeks. However, with the price action marking higher troughs, CMF undertook a hidden bullish divergence. This reading entailed the likely stall of the recent sell-off phase.
Additionally, as the upward Aroon (yellow) approached zero, the odds of the bulls holding the support at $2,992 were high.
Conclusion
Considering the hidden bullish divergence on its CMF and a likely revival of its Aroon up, the buyers would likely uphold the immediate support. But, with the 20 EMA looking south, the POC would continue to pose hurdles as the alt continues its tight phase.
Additionally, investors/traders should closely monitor the movement of Bitcoin. Especially since ETH shares an 85% 30-day correlation with the king coin.
