Technical Analysis of ETH/USD for February 20, 2024

ETH/USD Pauses The Rally Ahead Of $3,000 LevelKey Takeaways:Bearish Signal Emerges: The ETH/USD market made a Bearish Engulfing candlestick pattern, suggesting a possible reversal. However, bullish momentum persists, underscoring short-term optimism.Technical Supports Defined: Recent price action places $2,714 and $2,690 as crucial support levels, following the breach of a significant supply zone. Continued bullish sentiment aligns with an upward trajectory towards the $3,000 mark.Sentiment Analysis: Market sentiment remains predominantly bullish, with recent trends indicating an increase in bullish sentiment. However, vigilance is advised amid overbought conditions and potential corrective pullbacks.

Technical Analysis Outlook:

The ETH/USD pair has made a local high at the level of $2,929 and is currently consolidating the recent gains in a narrow range above of the last swing high on the H4 time frame chart. The bulls broken above the supply zone, so the levels of $2,714 and $2,690 will now act as the technical supports. The rally has been terminated with a Bearish Engulfing candlestick pattern on the H4 time frame, but the momentum is strong and positive, which supports the continueation of the short-term bullish outlook for ETH. The current market conditions are extremely overbought and there is a visible Bearish Divergence created between the price and the momentum oscillator, so a pull-back is still on the table. The next target for bulls is seen at the level of $3,000.

Intraday Indicator Insights:Buy Signals: 5 out of 23 technical indicators signal a buy, while 15 indicate a sell, with 6 remaining neutral.Moving Averages: 17 out of 18 moving averages advocate a buy position, with only 1 signaling a sell stance.Weekly Pivot Points:

Weekly pivot points serve as critical references for identifying trend reversals and support/resistance levels within the market structure:

Resistance: WR3 - $3,041, WR2 - $2,929, WR1 - $2,937Pivot: Weekly Pivot - $2,896Support: WS1 - $2,865, WS2 - $2,824, WS3 - $2,751Sentiment Scoreboard:

The general sentiment on the scoreboard is very bullish (77% vs.23% bears). Last week bullish sentiment increased even more (80% bulls vs.20% bears) together with the last three days sentiment (81% bulls vs.19% bears).

Trading Insights:

ETH/USD Bullish Scenario:

Sustained Momentum: A continuation of bullish momentum, coupled with RSI confirmation, could propel prices towards the next bullish target. Support Indicators: Maintaining positions above the EMA 100 and DEMA 50 reinforces the uptrend, offering potential entry opportunities. Resistance Breakout: A decisive breach of immediate resistance levels may usher in a fresh phase of upward price discovery.

ETH/USD Bearish Scenario:

RSI Reversal: A downturn in RSI, especially below the 70 mark, may signal the onset of a bearish reversal. Support Breach: A drop below the EMA 100 and DEMA 50 could invalidate bullish bias, prompting downside pressure. Divergence Confirmation: Confirmation of bearish divergence, coupled with price action reversal, suggests unsustainable highs and potential corrections.

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