Ethereum (ETH) Faces Potential Bearish Correction with Uptrend Break and Double Top Formation

Image source: Twitter/@twareshdenis_Ug

Published on January 6, 2024

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Ethereum (ETH) could be on the verge of a short-term bearish correction as it shows signs of breaking its uptrend and forming a double top pattern on the daily charts. The cryptocurrency market is advised to exercise caution as ETH’s ability to hold a crucial support line will determine its near-term price movement.

Uptrend Break and Bearish Divergence

ETH’s recent price action has raised concerns among traders and analysts, as it appears to be breaking its previous uptrend. Additionally, there is a massive bearish divergence indicating a potential reversal in the cryptocurrency’s price trend. This divergence occurs when the price of an asset continues to rise while its technical indicators, such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD), move in the opposite direction, signaling a weakening trend.

Double Top Formation

Adding to the bearish outlook, ETH is also showing signs of forming a double top pattern on the daily charts. A double top is a technical chart pattern that occurs when an asset’s price reaches a high point, retraces, and then attempts to rally again to the same high. However, if the price fails to break the previous high, it could indicate a potential trend reversal and a shift in market sentiment.

Short-Term Correction Possible

While this does not necessarily mean that ETH is entering a prolonged bearish phase, it does suggest the possibility of a short-term healthy correction. Traders and investors should be prepared for increased volatility and monitor the cryptocurrency’s ability to hold a yellow support line, which may act as a crucial level for determining its near-future price movement.

Exercise Caution

Given the potential bearish signals and technical patterns forming on the charts, market participants are advised to exercise caution and closely monitor ETH’s price action. The cryptocurrency market is known for its volatility, and sudden price movements can occur without warning. It is important to stay updated with the latest developments and follow the analysis of reputable experts and analysts.

Source: Twitter/@twareshdenis_Ug

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💎$ETH- Looks like breaking the uptrend with massive bearish divergence and double top in play on daily charts.

✅not saying we are going bear once again, but we can witness some short-term healthy correction if….

✅ $ETH fails to hold that yellow support line.

Be careful !! https://t.co/ae6z6OHKyr pic.twitter.com/T1iRFsqZmw

— Erudites 🇺🇬 (@Erudites_Ug) January 6, 2024

Source

@twareshdenis_Ug said $ETH- Looks like breaking the uptrend with massive bearish divergence and double top in play on daily charts. not saying we are going bear once again, but we can witness some short-term healthy correction if…. $ETH fails to hold that yellow support line. Be careful !! twitter.com/twareshdenis_U…