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Ethereum’s (ETH) price correction from the $4,000 price level has stalled twice at a key support level. This has positioned a level as a critical defense for buyers to end the correction and begin a price reversal.
Our earlier coverage of Ethereum's long-term prospects had projected the price pump going above the $3.5k price level but warned buyers to be wary of the selling pressure between $3.6k to $4k, due to ETH’s previous price action around that price level.
While the bullish price prediction played out right, the existence of selling pressure at the $4k range gave rise to a price dip that saw ETH briefly touch $3k. With the $3.3k floor holding over the past 72 hours, it could see buyers mount a solid comeback in the short term.
What do the Chart Indicators Portray for ETH?
The Relative Strength Index (RSI) showed that despite the selling pressure, buyers were still very much present. The RSI hovered around the neutral 50 mark to highlight the potential equilibrium between the buying and selling pressure in the market.
On the other hand, a look at the Chaikin Money Flow (CMF) which tracks capital inflows into a token noted a sharp increase in outflows. However, as of the time of writing, the CMF began to register a slight uptick which indicated that inflows might be coming back into ETH.
A key signal to go long would be the RSI crossing the neutral 50 and the CMF flipping positive. This would hint at buying pressure gaining dominance along with increased capital inflows.
Short-term targets will lie at $3.5k to $3.6k while long-term bullish targets will be at $4k to $4.4k. Alternatively, the long trade would be invalidated if ETH drops below $3.1k with the price correction likely to reach $2.8K to $3k.
Trade idea:
Entry: $3.3k (CMP)
Short term target: $3.5k
Long term target: $4k
Stop loss: $3.1k
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.
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