Ethereum bulls hold hopes for $ 10,000 despite bearish flag on ETH price chart

El token nativo de Ethereum, Ether (ETH), appears poised to extend its sell-off this week as it falters near a key support level of $ 4,000.

The price of ETH fell more than 5.50% on December 6 to an intraday low of $ 3,913. In doing so, it slid through the upward sloping support that constituted an Rising Channel that more or less looks like a Bearish Flag, a bearish continuation setup.

ETH / USD daily price chart with Bear Flag setup. Source: TradingView

Conservative traders often spot Bearish Flags when an instrument consolidates higher within a parallel channel after a significant price drop (called Flagpole). They anticipate that the price will break below the lower trend line of the flag. And when it does, traders set their profit target by measuring the height of the flagpole and subtracting it from the breakout level.

By applying the Bullish Flag strategy to current Ether price trends, the cryptocurrency can be expected to drop towards $ 3,200 in the coming sessions. Interestingly, the level is also close to the 0.5 Fib (~ $ 3,264) line of the Fibonacci retracement chart drawn from the low of $ 720 to the peak of $ 4,808.

More confirmation is needed

While the Bullish Flag setup suggests more pain for Ether going forward, some analysts believe that the Ethereum token still has more room to go higher.

For example, PostyXBT, an independent market analyst, asked to his huge Twitter fan base to pay attention to Ether’s deep price wick from Saturday, underscoring how the cryptocurrency’s sudden drop from close to $ 4,240 to just $ 3,575 (data from Coinbase) was greeted by traders with an aggressive buying response.

“The weekly close above $ 4,000 means that ETH is one of the strongest-looking currencies out there,” the analyst noted, adding that not many held the structure “despite the wick.”

b1808378 03a2 4069 b57d 3231b940e787
Weekly chart of ETH / USD perpetual futures contracts. Source: TradingView

Meanwhile, another popular analyst, Crypto FOMO, is also referred to Saturday’s rebound as a reason to stay bullish on Ether. In an analysis published Monday, The analyst said that the cryptocurrency’s ability to maintain its growing channel support (the Bearish Flag structure) could lead the bulls to push its value to $ 10,000.

“That is also because Ethereum is falling much less than other cryptocurrencies, which is very optimistic,” the channel noted, noting the growing strength of Ether against Bitcoin (BTC).

02b5824c 4e55 4ab5 b0af 7b81b4c15fe6
Performance of the top ten cryptocurrencies against USD and BTC in the last 30 days. Source: Messari

On its weekly chart, Ether appears to have been looking for a move towards $ 6,500 after breaking out of its Ascending Triangle.

Specifically, the ETH price left the Triangle range in the week ending October 25 after consolidating within it for just over four months. Nevertheless, traders retested the upper trend line of the structure as support, as is common in bullish continuation setups.

1299541f b079 4ea4 a7f1 6185b7d2dfad
ETH / USD weekly price chart with ascending triangle setup. Source: TradingView

As long as the price remains above the upper trend line of the Triangle, its probability of continuing its rally to the upside remains higher, as much as the maximum height of the structure, as shown in the chart above.

On the other hand, a decisive break below the lower trend line of the Triangle ran the risk of invalidating the bullish setup.

Solid fundamentals

James Wo, CEO / Founder of DFG Group, a Singapore-based venture capital firm, blamed Ether’s consistently positive correlation with Bitcoin behind its latest price corrections, noting that a spot market sell-off in the BTC market, led by the current Omicron FUD, has caused exchanges to liquidate $ 2bn in traders’ margin positions, hurting ETH as a whole.

But the analyst also anticipated a price rally for ETH based on its successful adoption of non-fungible tokens (NFT), decentralized finance (DeFi), and the metaverse.

7c7d4d18 4973 4589 81c2 c6c1ed0686a7
Top five DeFi chains based on total volume locked. Source: Defi Llama

“The levels of open interest levels seen up to this correction for both BTC and ETH were an important indicator that a bearish scenario was highly probable,” Wo explained, adding:

“We still believe that fundamentals are strong and long-term valuations remain very low based on technological advancements and the contributions that we are witnessing in this industry.”

The ETH / USD pair was trading at $ 4,050 at the time of writing.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves a risk, you must do your own research when making a decision.

Keep reading:

We would like to thank the author of this short article for this incredible material

Ethereum bulls hold hopes for $ 10,000 despite bearish flag on ETH price chart

Dispensary Business News