FX.co ★ Ethereum: flag formation

The price of Ethereum rallied in the short term, but a larger growth is still far from being confirmed. It's located at 1,706 at the time of writing. The price action developed a bearish formation, but this is far from being confirmed.

Ethereum is down by 0.60% in the last 24 hours but it's still in the green, +2.88% in the last 7 days. Bitcoin's retreat dragged ETH/USD down as well.

ETH/USD Strong Buyers!

As you can see on the H4 chart, ETH/USD dropped below the uptrend line but now it could try to test and retest it. After the last sell-off, the altcoin could come back higher trying to confirm the breakdown.

The price action developed a flag pattern which could announce a downside movement. Personally, I've drawn a downtrend line that represents a dynamic resistance. As long as it stays below the downtrend line, the altcoin could drop deeper.

ETH/USD Outlook!

Dropping below the flag's support and under the former low of 1,622 activates a larger drop. This scenario brings a new short opportunity.