Ethereum Course (ETH) is the largest platform for decentralized applications and smart contracts. The picture shows an Ethereum coin on a computer behind a price graph.
If we take a look at the Ethereum price and its performance over the past few months, we can see that it has had an incredible rally. From mid-July to early September alone, the price per ETH rose by a whopping 106%. However, this doubling in price has also cost a lot of strength and the correction that we were able to observe in the Ethereum price at the beginning of this month is not too surprising. But is this correction already over?
This is exactly the question I would like to address in this Ethereum course analysis and try to find a suitable answer with the help of technical chart analysis .
Ethereum course is on the brink
The Ethereum course is undoubtedly one of the top performers among the top 10 cryptocurrencies, but recently the entire market has cooled down and more and more uncertainty has spread. The last 6 days this uncertainty has been increasingly dispelled, but the question of whether the market and thus also the Ethereum price has already completed its correction remains open.
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A look at the chart tells us that the Ethereum price is currently trading in a pattern that is strongly reminiscent of a rising, widening formation.
A rising, widening formation can be recognized by the fact that it is bounded below by a horizontal trend line and above by a downward trend line. In the event of a downward breakout, prices are expected to continue to fall, although a pullback occurs in 72% of the time. In most cases, the volume increases to the bottom after the breakout.
The current pattern at Ethereum price currently has all these characteristics, as the following illustration shows. The only thing that currently seems to be between the Ethereum price and lower price levels is the horizontal line of the pattern. After the pullback in the last week, the price per ETH is currently trading above this trend line again and is enjoying its support. So you could say that the Ethereum course is downright on the brink.
Is the price of ETH falling back below $ 250?
The question we now want to shed light on is what will happen if the current support line doesn’t hold at around $ 365 and a day candle closes below it. In fact, this is the more likely scenario according to the statistics, which of course does not necessarily mean that it has to happen.
But what if?
The following measurement rule is used to determine the target price. First, the distance between the high and the horizontal line is calculated. This value is then subtracted from that of the horizontal trend line and the result is the price target. However, this target price is actually only achieved in 43% of cases. So if you want to be on the safe side, you should halve the distance determined in the first step and only then subtract it from the horizontal trend line. This target price is then achieved in 91% of the cases and is therefore considered very safe. I have drawn the latter as „1st price target“ in the above figure and the former as „2nd price target“. Price target „.
The first price target is just over $ 300, which is just below a crucial support level that cushioned the crash on September 5th. As already mentioned, this target price would be achieved in 91% of the cases.
At just 43%, the 2nd price target at just under $ 250 is much less likely, but impossible with nieces. However, there are still some notable support levels between this price target and the current Ethereum price, which would make this price target a very daring bet. In any case, these are only short to medium-term bearish scenarios that have yet to come true. In the long term, I am personally still convinced of the immense upward potential of the Ethereum course. I have already explained in part why this is so in the following article. #nofinancialadvise