- Ethereum closed below key support structure.
- Confirmation of a bearish pattern is now being tested.
- Upside potential is very limited as bears are increasingly likely to regain control.
Ethereum price action is now at the most bearish since December 13, 2021. If bears confirm the current breakout, sub $2,000 price levels are imminent.
Ethereum price faces final test before capitulation move to $1,800 begins
Ethereum price confirmed and Ideal Bearish Ichimoku Breakout on Friday with a close below the Ichimoku Cloud. This is the first time that bearish entry condition has occurred since December and only the third occurrence in two years.
Bears were initially unable to push ETH lower due to the shared support zone at $2,570 – the 61.8% Fibonacci retracement and the bottom trendline of a bear flag. The Fibonacci retracement is derived from the all-time high to the low of the strong bar from the July 2021 to November 2021 rally.
Sunday’s close then confirmed a breakout below the bear flag and the 61.8% Fibonacci retracement. During Monday’s intraday trading, bulls have unsuccessfully attempted to return Ethereum price inside the bear flag. If bears keep ETH out of the bear flag, that is likely the signal short-sellers are waiting for to jump in on another round of selling.
The initial target for bears is the 100% Fibonacci expansion at $1,825 – but sellers will likely get halted at the bottom of the weekly Ichimoku Cloud (no shown) at $2,300. The bottom of the weekly Ichimoku Cloud has been a primary support level for Ethereum price and has yet to break as support.
ETH/USD Daily Ichimoku Kinko Hyo Chart
Bullish prospects are very unlikely to occur, given these major bearish confirmation signals. The only way for bulls to invalidate any near-term bearish outlook is for an Ideal Bullish Ichimoku entry to occur – which would require a close at or above $3,170 or a 24% increase from today’s open.
