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Ethereum seeks 20% gains above a weekly close of $1,550

September 16, 2022 19:21:01

Ethereum sinks 14% post-Merge and remains in the control of the bears. The on-chain data suggests a record number of ETH tokens flowed onto exchanges, indicating the flow of transactions. Almost 1.5 million Ethereum were transferred in just 24 hours. Such activity was last seen in February 2019.

In general, an exponential rise in the transaction of the asset is a signal that investors intend to sell it. As a result, the price declined sharply after initial gains.

Ethereum price continues to decline to post the monumental Merge. The price has been trading along with the ascending trend line from the lows of $1,003.87. Since then the asset appreciated nearly 35% to the swing highs of $2,028.46. This also turned out to be the exhaustion of the upside move.

The formation of the ‘Head & Shoulder’ pattern, which is a bearish reversal technical pattern, resulted in the decline of the price. The sellers became active near the neckline of the formation that happened on August 26. After testing the support near $1,420 on August 28.

The buyers came in near the support level and once again the price entered the relief rally. However, the bullish slopping line acted as an upside barricade for the price. In addition, the formation of a Doji candlestick indicates a lack of buying momentum.

The bearish crossover of the 20-day and 50-day exponential moving averages added to the bearish sentiment.

However, the sellers seem to find it difficult to break the horizontal support zone of $1,420 and $1,440. The recent market structure is oversold, which means a bargain buying opportunity could be there for investors.

A weekly close above $1,550 could be a reversal of the price. A decisive move above this level would seek 16% gains. The bulls would attempt to test the $1,800 mark.

On the flip side, a break below the session’s low would trigger another round of selling. On the downside, the price could retest at $1,200.

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