ETH-“Descending Channel Formation”

1-Day Analysis:

Big Picture: Selling pressure is now being driven by the failure to break through the congestion zone. If Ethereum continues on its downward trend and falls below 1550, even if just partially, it may give rise to the complex bullish divergence. This might then lead to a strong, sustainable rebound over the next several days, perhaps mean-reverting towards the daily EMA-50, which hasn’t been tested in over 40 days.

On the Upside Ethereum is encountering short-term resistance between 1585 to 1590 levels. Above these levels, the next significant degree of resistance comes from 1620 to 1630. In combination with the horizontal levels, a few crucial EMAs are positioned here. Currently, the faster trailing EMA-26 is located at these levels. Since 22nd July, this EMA has prevented any higher closures. This same level also nullified the most recent advance into the congestion zone.

On the Downside the closest intraday support level is 1565. However, the stronger support for the session comes at 1550. If the price can hold the 1550 support level, a potential double bottom pattern could potentially be produced. If the pattern holds, the coin could make a strong recovery; but, if sellers are able to breach below the 1550 level, the decline will then continue into the 1520 to 1510 levels.