Comprehensive Step-by-Step Technical Analysis of Ethereum (ETH)

1. Trend and Price Action Overview

• Long-term Trend: From late April through July, ETH has been on a pronounced uptrend. Price action moved from ~$1,770 to $3,573 (+102%), with notable acceleration after mid-June. The rally is punctuated by short, sharp corrections but no deep retracement.
• Short-term Trend: After peaking near $3,850 on July 21, price has entered a corrective phase, retracing to ~$3,573. The last 24 hours show selling pressure — successive hourly candles with lower highs and lower lows, ending the day with clear downside momentum (low at $3,547).

2. Support, Resistance, and Key Levels

• Supports:
  • Near-term: $3,550 (intraday low), $3,500 (round-number psychological level), $3,370 (July 16 close).
  • Deeper: $3,140 (July 15 close — major breakout level).
• Resistances:
  • Immediate: $3,600 (closest hourly rejection), $3,750 (recent swing high July 22).
  • Higher: $3,850 (July 21 high).

3. Volume Analysis

• Rally Volume Expansion: The July rally from $3,000 to $3,800 came on expanding volume, validating the move.
• Recent Selling Volume: The recent rejection near $3,800 and subsequent decline are met with increasing volume (notably, July 22-23), affirming the strength of the selling.

4. Momentum Indicators

• RSI (Relative Strength Index) Estimate:
  • Based on rapid run-up to near $3,800 and subsequent reversal, RSI likely peaked above 70 (overbought) and has now pulled back toward the mid-50s. Recent failed retests of $3,750 suggest bearish divergence (price makes higher highs, RSI lower highs).
• MACD:
  • Crossover likely occurred late June; now, the histogram is compressing as price stalls, signaling loss of bullish momentum. A bearish cross is imminent or has begun.

5. Candlestick and Chart Patterns

• Rising Wedge (Bearish): The uptrend from $3,000 to $3,800 forms a rising wedge. Breakdown confirmed with Thursday’s sharp candle.
• Shooting Star/Long Upper Shadow: Several rejections at or near $3,800 followed by long upper shadow candles and lower closes indicate distribution by larger holders.

6. Moving Averages

• 21EMA (Hourly): Broken on the downside in the last 6 hours.
• 50EMA (4-hour): Currently in play around $3,570 — price is oscillating at this level, testing its resolve as support. A decisive break leads to deeper pullback.
• 200EMA (Daily): Well below price, but mean reversion pullbacks possible, targeting the $3,150-$3,300 range.

7. Fibonacci Retracement (From July 10 low ~$2,950 to July 21 high ~$3,850)

• 23.6%: $3,640
• 38.2%: $3,450
• 50%: $3,400
• 61.8%: $3,260
• Price is currently below the 23.6% retracement, pointing toward $3,450 as the next likely target.

8. Order Flow and Market Structure

• Break of Structure: The higher-high/higher-low rhythm is broken. Latest price action forms a lower high and lower low on the 4-hour/1-hour charts.
• Liquidity Pools: Stop runs likely below $3,550, making $3,450-$3,500 an attractive magnet for short-term sellers.

9. Volatility (ATR Observation)

• ATR has expanded during the rally, but is now declining as ETH churns and sells off — a volatility contraction often precedes breakdowns.

10. Sentiment & Overextension

• Extended Run: Price is 100%+ above April lows, and the recent vertical move indicates euphoria. Last two days’ persistent selling is textbook of profit-taking after a blow-off top.
• Funding Rates: While data isn’t provided, such rallies often coincide with elevated long funding rates, leading to forced liquidations lower (adding to cascade effect).

11. Intermarket & Historical Context

• BTC-ETH Correlation: ETH underperforms BTC in post-vertical rallies, especially after significant news or ETF hype. If Bitcoin is also consolidating after a run, expect ETH to underperform on down moves.

12. Summary & Synthesis

• Multiple technical signals indicate a corrective phase is underway:
  • Failed new highs above $3,800.
  • High-volume selloff and lower lows intraday.
  • Loss of key short-term moving averages.
  • Breakdown of trend structure and bearish chart pattern resolution (rising wedge/rounded top).
  • Early signs of bearish momentum and overextension unwind.
• Next 24 Hours:
  • Expect a test of major support near $3,450, with potential wicks to $3,400, as stops are taken out and sellers push price lower.
  • Downward path aided by short-term bearish momentum, waning buying interest, and likely elevated long positions leading to further liquidations.
• Invalidation:
  • A sharp reclaim of $3,650-$3,700 on significant volume would invalidate the short-term bearish thesis.

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Final Trade Decision

Bias: Bearish, expecting continued short-term downward movement.

Sell (Short Position) at $3,575 (current region, as price churns at resistance and loses momentum).

Target $3,450 (38.2% Fibonacci retracement, prior major hourly support, likely liquidity pool for take-profit).

Stop: A conservative stop can be placed above $3,650, but since the thesis is bearish for the next 24 hours, best risk-reward is achieved by aiming for a swift move toward $3,450.

Conclusion

The convergence of technical indicators, chart patterns, and momentum analysis all point to a short-term retracement after an extended euphoric rally. With volume expanding on down moves and price structure breaking, sellers are likely to remain in control for the next 24 hours.

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