Over the last few days, Ethereum [ETH] saw a volatile breakdown from its three-month trendline resistance (white, dashed). The 20 EMA (red) has substantially impaired the buying ability for quite a few months now.
The effects of the recent market setbacks have fueled the alt’s bearish fire. The fall below the $1,093 level has pulled ETH to its January 2021 lows.
Now that ETH saw a patterned break, the $1,045 support could ensure a tight phase near the Point of Control (POC, red). At press time, the alt was trading at $1,075.8.
ETH Daily Chart
ETH’s three-month trendline resistance has exhibited a hefty bearish control while the price struggled to find a spot above this line. To top it up, the 20 EMA kept all the bull rallies under a robust check.
Since early April, the bears have kept the price below the 20 EMA while constantly finding fresher multi-month lows. ETH lost nearly 70% of its value from 5 May to 18 June. Consequently, the alt gravitated toward its 17-month low on 18 June.
Should the $1,045 support trigger a near-term buying response, it could delay the ongoing bearish tendencies and propel a squeeze phase near the POC.
Also, with the 23.6% Fibonacci level standing sturdy, the buyers could face a tough time toppling the $1,097 zone. A decline below the immediate support would expose ETH to a potential retest of the $930-mark. Any bearish invalidations could aid the buyers in provoking a rather short-lived rally until the 38.2% level.
The Relative Strength Index (RSI) coincided with the price action to display a one-sided bearish market. As the index plunges near its oversold territory, it could be reasonable to assume a revival from this zone. But the inability to find a close above the 37-mark could encourage the ongoing drawdowns on the chart.
On the other hand, the recent CMF’s growth above the zero-line resonated with the buying strength. But its reversal from the trendline resistance has affirmed a bearish divergence with price.
The bulls needed to step in to ramp up the buying volumes at the $1,045 support region to prevent a downside risk of nearly 10%. The alt could see a squeeze near its POC before a volatile break.
However, investors/traders need to watch out for Bitcoin’s movement. This is because ETH shares a staggering 99% 30-day correlation with the king coin.