$ETH has dropped back below the daily medium-term downtrend resistance and is attempting to regain that level. Let's do some price action analysis to assess the likely direction.
The reaction from the green box region in the middle is positive, but the RSI side still does not approve the rise with the current momentum. There is a hidden negative divergence in the RSI in the 4H and above time frame.
đFor the continuation of the rise:
Technically, in order to say that the upward movement has started, the lower red box supply zone must be broken, but personally I prefer to see a candle body close above the upper red box.
đWhy?
Because this region is the optimal trade entry region for the continuation of the decline after the correction of the last downward swing movement, and at the same time, a supply zone has formed and overlapped in the 4H and below time frame. It is likely to work stronger than the lower supply zone.
The 3,987 that I mentioned as our most important resistance in the previous analyses I shared also points to the same level, and as you can guess, these formations are not by chance.
If the decline continues, if the last pinned upper green box does not work, the lower green box support is available as the daily bullish order block in the higher time frame.
I don't really care about formations, but for those who want to look at it formation-based, the target of the double top formation (the formation equivalent of what we call a swing failure pattern in price action) that caused the decline above is approaching the liquidation level I marked at the bottom, and I hope it doesn't work.
