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Uptrend support has buckled, momentum is bearish, yet a wedge pattern keeps hope alive for longer-term ETH bulls. $3715 is the level to watch near-term.
- Uptrend break signals possible shifting directional risks
- $3715 support key for near-term price action
- Momentum signals favor bearish setups
- Falling wedge hints at longer-term bullish risk
Summary
ETH/USD is at a crossroads, with short-term momentum pointing lower while a falling wedge pattern suggests longer-term upside potential. Price action around $3715 may prove instructive, offering setups for both bears and bulls as the market decides its next move.
ETH/USD Bearish Unwind Stalls
Right now, ETH/USD is testing $3715, a level where the price bounced on three occasions last month. Continuing the form of October, the first test we’ve seen in November has resulted in a similar move, limiting downside despite the bearish break of long-running uptrend support from the April lows last week. As such, near-term price action around $3715 may prove instructive on longer-term directional risks for ETH/USD.
Source: TradingView
If the price were to break and close beneath $3715, it would create a potential short setup where positions could be established below with a stop above for protection, targeting either downtrend support beneath $3600 or support at $3500. Given the break of uptrend support and increasingly bearish picture from RSI (14) and MACD, which continue to push lower, indicating strengthening downside pressure, the preference remains to sell into strength given the backdrop.
However, if the price were to continue bouncing off $3715, it would open the door for a possible countertrend trade, allowing for longs to be established above with a stop below to protect against a resumption of the bearish trend. ETH/USD ran into sellers at $3900 earlier today, as was the case last Friday. It therefore screens as a logical initial target, with $4100 another given the amount of price action either side of it over recent weeks.
Regardless of whether we see downside or upside from here, it’s notable that when you zoom out on the price action, ETH/USD sits in a falling wedge pattern, hinting that if we see an eventual bullish breakout of the downtrend from the high set on October 7, it may spark an eventual return to the record high of $4867 set in August.
There’s a lot of water still to go under the bridge before we see that possible outcome, but it’s something to keep in the back of your mind when assessing the price action over the coming weeks.