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ETH Price Momentum Fades After Rejection At $1.6K

As the ETH price rise fades, Ether may go below $1,350 in August. On July 26, Ethereum’s native token Ether (ETH) fell, lowering expectations of a long-term price rebound. The ETH/USD pair fell by over 5% before recovering slightly to above $1,550. According to CoinGlass statistics, these nighttime transactions liquidated almost $80 million in Ether positions in the last 24 hours.

The seesaw behavior also highlighted an underlying bias conflict among traders caught between two opposed market realities. The first is the excitement surrounding Ethereum’s probable switch to proof-of-stake in September, which has helped Ether recover 45% month to date. This bullish hype, however, is at variance with macroeconomic headwinds, including the Federal Reserve’s and the European Central Bank’s hawkish stances, which put pressure on risk assets and saw Ether’s price fall 68% from its record high of $4,950 to date.

However, the price of ETH may rise in the short future. Analyst PostyXBT, for example, expects Ether to see an interim upside retracement based on the token’s previous swings within an ascending channel pattern, as shown below. In other words, assuming the pattern holds, the price of ETH might reach $1,700 before the end of July.

A momentum oscillator indicator reveals significant differences when comparing the same recovery pattern to Ether’s four-hour relative strength index (RSI). Interestingly, since July 18, Ether’s price has reached greater highs while its RSI has been making lower highs.

This indicates a negative divergence between ETH’s price and momentum, implying that bulls are losing market control, and a slump may ensue. Ether also risks falling below the lower trendline of its ascending channel, which coincides with two more price supports; the 50-4H exponential moving average (50-4H EMA; the red wave) at roughly $1,500 and the 0.5 Fib line near $1,475. Should this bearish scenario play out, losing these critical supports would likely bring the price below $1,350 (the $0.382 Fib line and the blue 200-4H EMA wave) in August, a 10% -15% from June’s price.

Featured Image: Megapixl @Mejikyc

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