Ethereum rose from $ 715 to $ 1,169 in three days. However, the highest level of $ 1,168 was instantaneous, and the price had to retreat soon after as Ether formed a swing error pattern. ETH is often an indicator of the health of the altcoin market, and its tremendous gains over the past 48 hours have seen the market follow in its footsteps. In fact, Ethereum had a 0.25% funding rate on BitMEX, indicating that the market is full of long positions.

 

 

It is not yet clear whether the swing failure will lead to gradually liquidated long positions or whether the market will find support due to the buying pressure that comes into play. Given the rising nature of the market in recent weeks, it is likely that this is a decline and not a reversal for ETH.

Hourly Ethereum Chart

The oscillation error model is a trading model generally considered by large traders for liquidity. This setup sees the price rise above a significant rise and stops losses to create liquidity for a move in the opposite direction.

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It was seen that ETH created a V-top model. The coin price retraces more than 38.2% of the rise from $ 715 to $ 1168, indicating that this V-top model will likely go further south and could be used to enter short positions.

But Bitcoin surged to over $ 30K and Ethereum, sometimes lagging behind BTC, seemed to be starting to catch up. OBV showed that the purchase volume of the last few days outweighed the sales volume of the last few hours.

Given the short-term volatility of the digital asset, sell positions can quickly reverse, while long positions can be wrong. Therefore, some important levels are presented and some scenarios are highlighted in the graphs.

The bearish trend for ETH will be a close below the $ 968 level, 38.2% retracement level, and losses continuing to form a V-top pattern. This could bring the price back to the $ 834 support level, or possibly a drop, $ 700. However, according to the evidence available, such a deep correction seems unlikely.

Another possibility is that the price finds a significant support at the 50% or 61.8% retracement levels at $ 914 and $ 862 respectively, forming a double bottom pattern or a similar reversal and ending the short-term downtrend.

 

Result

At the time of writing, there was insufficient evidence to confirm entering a long position in the ETH market. However, some important levels have been highlighted. The recent rise in the crypto space has voided many short positions setups, suggesting that short positions can be unnecessarily risky in the current environment.

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