Amid the broader market correction, the Ethereum coin witnessed a three-day losing streak with its price falling from $3286 to $2888 accounting for 12%. The recent fall backed by increasing volume hints at the sellers’ conviction to lead the asset value lower as BTC goes Sub-60K. However, an analysis of the daily chart shows the correction still holds above a healthy retracement level and keeps the bullish pattern intact for a potential reversal.

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Ethereum’s Falling Wedge Hints a Silver Lining in the Bearish Cloud

Ethereum Price| Tradingview

In the past seven weeks, the Ethereum price has shown a textbook example of a downtrend with new lower highs and lows in the daily chart. This price swing connected with downsloping trendlines reveals a falling wedge pattern which is a bullish continuation setup often spotted in an established uptrend.

Under the influence of this pattern, the ETH price plunged from a $4084 high to its current trading price of $2899, registering a 30% fall. If the broader market selling persists, this altcoin may fall another 6% to hit a lower trendline at $2700.

The aforementioned level coinciding with the 50% retracement level and 200-day EMA slope created a high demand zone for buyers to counterattack. The renewed demand pressure at $2700 will indicate an initiate sign of local bottom formation. 

However, the buyers would need an upside breakout from the wedge pattern to develop a renewed recovery trend.

Also Read: ETH Futures ETF Issuers Stay Positive on SEC Approval Despite Feud

Historical Returns Hints Ethereum Price Recovery In May

Ethereum Monthly returns| Coinglass

Ethereum’s historical performance in May shows significant volatility with a mixture of substantial gains and losses over the years. So far In May 2024, the asset saw a modest decrease of -3.79%, while in 2023 a slight increase of +0.16%. Notably, May 2022 experienced a sharp decline of -28.84%. 

In contrast, May 2017 and 2019 saw impressive surges of +161.43% and +56.65% respectively, highlighting the potential for high returns despite overall instability. Furthermore, the ETH price witnessed losses in years like 2018 and 2021, which posted -13.96% and -2.31% respectively. 

However, the average gain of +23.66% suggests a higher potential for Ethereum to rebound and keep a bullish outlook this month.

Technical Indicator

Average Directional Index: The ADX slope uptick near 23% indicates the sellers are gaining momentum for a prolonged downfall.
Exponential Moving Average: The ETH price trading above the 200-day EMA slope accentuates the broader market sentiment remains positive.

The post What Historical Trends Hint for Ethereum Price Behavior in May? appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am