[Worrying Pattern Foreshadows Possible ETH Selloff: What Will Happen? 】
Ethereum has recently faced significant challenges facing the key resistance area at $2,400, which serves as the upper boundary and static resistance for the multi-month wedge pattern.
Nonetheless, the emerging head-and-shoulders pattern signals a possible pullback toward the $2,000 support zone.
The daily chart shows Ethereum experiencing a strong rally to yearly highs at $2,400, demonstrating buyer power. The golden cross further highlights the bullish sentiment.
However, after reaching the upper boundary of the multi-month wedge pattern and key resistance at $2,400, the upward momentum was stalled, selling pressure increased and bullish momentum stalled.
In the face of these challenges, a head and shoulders pattern appears, signaling a bearish reversal. Price is at a critical point breaking out of the neckline (orange line). Bearish divergence indicates a possible decline in the coming days.
Considering the near-term trend, a break below the neckline could trigger a downside move back towards the $2,000 support.
On the 4-hour chart, the price found support between the 0.5 ($2,211) and 0.618 ($2,166) Fibonacci retracement levels, preventing further losses.
Importantly, this support zone coincides with the dynamic support trendline, putting pressure on sellers. But if sellers take over and the price breaks below these key supports, it could trigger a retracement towards the $2,000 area.
On-chain analysis shows that futures market sentiment provides insight into Ethereum’s prospects. An increase in open interest indicators often signals a market reversal.
Currently, open interest is rising but not reaching significant highs, suggesting a pullback is possible but the futures market is not overheated. Moderate open interest means the bullish trend is likely to continue in the long term. It is important to monitor this indicator to identify possible shifts in market sentiment.
