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The ETH price has been selling off consistently for weeks now, down more than -17% from its previous highs of $3,577.
However, this sell-off has been contained within a Descending Channel Pattern. And for those of you that don’t know the significance of this pattern:
A Descending Channel Pattern is a Bullish Reversal Pattern, it indicates that the price is in a retracement and once that is over we can expect a bullish breakout to the upside!
And that is exactly what we believe might be playing out right now on the Ethereum 4-hour timeframe.
In this Ethereum analysis, we will be breaking down this Descending Channel Pattern, as well as the key levels we will be watching out for in the coming days.
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Ethereum Descending Channel Pattern
The image above is a typical example of what a bullish breakout of a Descending Channel Pattern looks like.
And when you compare that image with what exactly is currently playing out in the Ethereum 4-hour timeframe, you get a sense of direction on what we can expect next and what to look out for.
Right now, Ethereum is still trading within that Descending Channel Pattern, what we are waiting for right now is to see a bullish breakout from this channel to confirm the end of the Ethereum downtrend.
What Happens If Price Fails To Break Through?
If the Ethereum price fails to breakthrough this Descending Channel Pattern, there is a very high probability we might see one more leg downwards before it tries again.
However, the most important thing to us as traders is to stand aside and wait for this Bullish Breakout Confirmation before looking to enter any type of buy trade on Ethereum.
We are watching a Descending Channel Pattern form on the Ethereum 4-hour timeframe. This pattern is a bullish reversal pattern and points to a very high likelyhood that we might see a breakout and bullish rally in the ETH price sometime in the furture.
However, right now the pattern is still yet to be completed and the best course of action for now is to stand aside and wait for that breakout confirmation.
Until that bullish breakout occurs, we will watch and wait!
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