Hi friends! Welcome to this update analysis on Ethereum! Let's get right to it. Looking at the four hour chart, you can see that ETH has broken down from the purple bear flag , just as anticipated. If you recall from my yesterday's ETH tweet, I said "be on the lookout for a breakdown of the current bear flag , as the 20 EMA (in blue) begins to cross into the flag formation , increasing the likelihood of a breakdown. From there, look for a breakdown below the neckline of the large head and shoulders pattern." So, you can see that the 20 EMA was resistive, and it produced a bear flag breakdown. ETH is now moving in to test the neckline resistance of the massive head and shoulders pattern, so we will have to pay close attention to the price action around here. If ETH breaks down, the initial support is at the 78.6% retrace, followed by the 491.90 level. A break below there, could open the door to a swift decline down to the 385.20 level.
The MACD appears to be moving to form a bearish crossover, so the momentum appears to be returning to the downside swing, after breaking down from the bear flag consolidation. On the upside, I would continue to expect the 20 EMA to be resistive. Judging by how quickly ETH has returned to the neckline support (in red.) I would expect that a breakdown could occur in the coming days. Good luck trading, comrades!
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DISCLAIMER
This information is not a recommendation to buy or sell. It is to be used for educational purposes only.