Step-by-Step Technical Analysis for Ethereum (ETH)

1. Trend and Price Action Review (Daily & Hourly)

• Price Evolution: From early May (sub-$2,000 region), ETH soared to a recent peak above $3,940 before retreating to current levels (~$3,540). This reflects a parabolic rally since mid-June, peaking late July, now replaced by sharp retracement.
• Recent Downtrend: Hourly candles over the last 24 hours capture a clear shift: ETH fell from ~3,800 to nearly 3,513 before slight bounce to 3,540. The session is marked by lower highs/lows, indicative of sustained selling pressure.
• Volume Analysis: The largest sell volumes coincide with the drop from 3,800+, confirming distribution/exit from overleveraged bulls.

2. Chart Patterns

• Double/Triple Top: Peaks above 3,870–3,940 (July 27–28), followed by lower highs (3,883, 3,832, 3,808), suggest strong resistance and possible topping formation.
• Bearish Engulfing Candles: Large red candles overtaking previous green bars near cycle tops on both daily and hourly confirm reversal risk.
• Recent Price Compression: Recent hourly candles (after the plunge) show tight bodies, indicating potential for a next leg if new orders overwhelm weak hands.

3. Support & Resistance

• Immediate Support:
  • Short-Term: 3,500 (tested on 4 occasions in hourlies—acted as both flex support and breakdown trigger)
  • Mid-Term: 3,400/3,350 (minor pivots from earlier July)
• Immediate Resistance:
  • 3,600–3,650 (intraday bounce highs)
  • 3,800+ (cluster area pre-drop; bears likely to re-enter before this is reclaimed)

4. Trend/Fit with Moving Averages

• 20/50/100-Hour SMA:
  • Current price is below all short/intermediate averages—confirms short-term trend is down.
• 200-Hour SMA:
  • Likely also breached, suggesting mean-reversion trades are off-table, and trend-followers dominate.
• Daily 20/50 SMA:
  • Current candle has closed below the 20-SMA and is contesting the 50-SMA. Breakdown below this triggers further algo or systematic selling.

5. RSI & Momentum Indicators

• Hourly RSI:
  • Dipped into oversold (<30) during initial selloff, now rebounding yet still sub-40—momentum not recovered.
• Daily RSI:
  • Plateaued/rolling over from overbought (>70) to neutral/weak territory (~48–52), suggesting more downside possible.
• MACD:
  • Hourly & Daily MACD show bearish crossovers; histogram increasing negative divergence, further supporting sell bias.

6. Order Flow/Volume Profile

• Heavy Sell Volumes: Particularly during the 3,800-to-3,500 collapse, indicative of institutional/large trader exit.
• No Significant Climax Bottom Yet: While volume is high, there is no overwhelming bid absorption or obvious high-volume reversal candle, so bottoming is not (yet) in sight.

7. Fibonacci Retracements

• Recent rally low to high (June ~2,300s up to July ~3,900):
  • 38.2% Fib: ~$3,355 (lining up with noted support)
  • 50% Fib: ~$3,100
• ETH has breached the 23.6% retracement and is approaching 38.2%—suggests next target/support is 3,350–3,400 region if selloff resumes.

8. Volatility Analysis

• ATR/EWMA Volatility: Both daily and hourly ATRs have spiked with the recent drop, further suggesting break of prior low-volatility range.
• Implied Volatility (Option Markets): Typically expands post-selloff like these—if on-chain open interest data available, expectation would be for heightened liquidation risk below 3,500.

9. Sentiment & Mean Reversion Check

• Sentiment Shift: Market was euphoric near 3,800–3,900, now turning risk-off. Social metrics (trader chatter/news) likely reflect growing fear/uncertainty.
• No Mean Reversion Signals: As price is below short/medium averages and momentum is negative, mean reversion is not advised until clear support is found.

10. Confluence & Probabilistic Projection (Next 24h)

• Bias: Further weakness expected unless ETH can reclaim 3,600/3,650 with authority.
• Projection: Most probable scenario is: retest/breach of 3,500, move toward 3,400–3,350 (fib, horizontal support)
• Upside Scenarios: Any short-term bounces to 3,600–3,650 likely to be sold into; aggressive buyers may attempt to front-run 3,400–3,350 but currently low probability with no reversal evidence.

11. Strategic Recommendation

Given confluence of:

• Loss of momentum
• Break of key moving averages/supports
• High-volume rejection from highs
• Lack of bottoming reversal signals or bullish divergence

The optimal approach is a short position (Sell) targeting the next major support.

12. Position and Price Selection

• Open Price: Prefer close to current price (or at minor bounce)—open short near 3,535–3,545.
• Close Price (Take Profit): Target the 38.2% Fibonacci retracement and horizontal support at ~3,375–3,400.

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Summary Table

Action	Price	Rationale
Sell (Short)	3,540	Breakdown, retest failed, trend
Take Profit	3,390	Key support, fib confluence

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Final Notes

• If resistance at 3,600–3,650 is reclaimed, re-evaluate, but as of now, technicals firmly support a Sell.

Caution: Use stop losses and risk protocols. If macro/crypto news hits, re-assess real-time.