ETH on the Edge: Deep 78.6% Pullback Near $2.9k Sets Up a Sell-the-Rip Opportunity

Executive Summary and Next-24h View

• ETH has broken the 3,000–3,060 shelf intraday and is stabilizing around 2,940–2,950 after a swift selloff. Trend, breadth, and momentum are bearish on daily and 4h; hourly is oversold with minor positive divergences, suggesting a likely “sell-the-rip” setup over the next 24 hours. Base case: a reflex bounce into 2,980–3,020 that fades toward 2,880–2,900.

Market Context and Structure

• Regime shift: From a mid-Dec relief rally (~3,446 high on Dec-10) back into a dominant downtrend that began in October. The market rejected the 3,300–3,350 zone and lost 3,100–3,060 support, converting it to resistance.
• Structure: Lower highs since Dec-10 (3,446 → 3,325 → 3,158 intraday) and lower lows; break below the 3,000 psychological pivot confirms a bearish bias. Intraday flows show persistent selling pressure and only shallow bounces.
• Volume: Distribution characteristics—down days and down hours carrying heavier volume than up intervals. The 3,000–3,050 volume shelf has been pierced; next high-volume node sits near 2,850–2,900, with a deeper shelf near 2,760–2,800.

Key Levels (Multi-timeframe)

• Resistance: 3,000–3,025 (psych + 61.8% retracement from the Nov low to Dec high), 3,060–3,080 (broken shelf), 3,120–3,160 (hourly congestion), 3,190–3,210 (daily swing), 3,320–3,350 (local high-volume node), 3,440–3,450 (Dec-10 high).
• Support: 2,930–2,940 (current balance), 2,912–2,918 (78.6% retrace from 2,766→3,446), 2,887 (daily S3 pivot approximation), 2,860 (minor node), 2,800 (round-number shelf), 2,766 (Nov-21 swing low).

Trend and Moving Averages (Daily)

• 20-D SMA ≈ 3,076: Price below—short-term trend down.
• 50-D SMA (est.) ≈ 3,350: Price below—intermediate trend down.
• 200-D SMA (est.) ≈ 3,800–4,000: Price below—primary trend down.
• MA posture: Bearish stack (price < 20D < 50D < 200D). Rallies into 3,000–3,100 likely face supply.

Momentum and Oscillators

• RSI(14, daily): Mid-40s to low-50s recently, now pressured lower by the breakdown; not deeply oversold on daily (room to fall), but hourly is oversold.
• RSI(1h): Oversold during the dump to ~2,930 with mild bullish divergence between the 17:00 and 20:00 lows (price made marginal new low, RSI didn’t). This favors a reflex bounce before trend continuation.
• Stochastic (1h/4h): Sub-20 and curling—supports a brief bounce; on 4h still below midline—bearish control remains.
• MACD (daily): Bearish crossover with expanding negative histogram—momentum shift to sellers remains intact.

Volatility and Bands

• Bollinger Bands (20D): Midline ≈ 3,076; upper ≈ 3,336; lower ≈ 2,816. Price is one sigma above the lower band—oversold pressure but not at an extreme; bounces often occur near the lower band, but trend-following probability favors rallies being sold.
• Keltner Channels (20,ATR): Intraday extension pierced/bordered the lower Keltner—typical setup for a snapback into the midline followed by renewed selling if trend remains.
• ATR(14D): Elevated after the early-Dec spike—implies 24h expected range of roughly 150–220 points. A 2,880–3,020 day is plausible with tails.

Fibonacci and Confluence

• Swing Nov-21 low (2,766) → Dec-10 high (3,446):
  • 38.2%: ~3,186 (rejected Dec-11/12)
  • 50%: ~3,106 (lost)
  • 61.8%: ~3,025 (now resistance)
  • 78.6%: ~2,912 (current support candidate)
• Price is sitting between the 78.6% retracement (~2,912) and the 3,000 round number/61.8% resistance cluster. This is a classic “deep retrace” zone where a bounce can occur, but the loss of 3,025 suggests the path of least resistance remains down.

Ichimoku (Daily)

• Price is below Tenkan and Kijun; the Kumo sits substantially above (~3,200–3,300). Bearish context. Lagging Span (Chikou) below price and cloud—reinforces downside bias.

Volume/Flow Tools

• OBV: Rolling over since Dec-10, confirming distribution. No evidence of aggressive accumulation at 2,900s yet.
• Volume Profile: 3,000–3,050 shelf broken; thin air into 2,880s; next thick shelf near 2,800 and major at 2,760–2,780. If 2,912/2,887 cracks decisively, acceleration toward 2,800 is likely.

Pivot Points (Classic, using Dec-14 H/L/C)

• P ≈ 3,074.6; R1 ≈ 3,114.6; R2 ≈ 3,168.6; S1 ≈ 3,020.6; S2 ≈ 2,980.7; S3 ≈ 2,886.8.
• Price is below S2 and hovering between S2 and S3—bearish regime. First meaningful resistance aligns with S1/S2 zone (2,980–3,020).

Pattern Recognition

• Intraday: Bearish continuation flag forming around 2,930–2,950 after a vertical drop from ~3,150. Typical resolution is one more leg lower unless a squeeze reclaims 3,000–3,020.
• Higher timeframe: Descending channel from Oct highs; recent Dec pop to 3,446 failed near prior supply and reverted lower—consistent with a larger bear channel retest.

Elliott Wave (Heuristic)

• From 3,175 intraday high to ~2,930: wave 3-like impulsive leg. Current 2,930–2,950 consolidation looks wave 4-ish, implying a potential wave 5 probe into 2,880–2,900 (possibly 2,860) before a larger corrective bounce develops.

VWAP and Mean Reversion (Intraday)

• Price is materially below today’s session VWAP (~3,11x–3,12x earlier), indicative of persistent seller control. First mean-reversion magnet on bounces is the 2,990–3,020 pocket; failure there would likely be sold.

Risk Scenarios for Next 24 Hours

• Base Case (≈60%): Reflex bounce into 2,990–3,020, failure near 3,000–3,025, then drift lower to 2,880–2,900. Close near the low third of the day’s range.
• Squeeze Case (≈25%): Momentum squeeze over 3,025 triggers a run to 3,060–3,080; broader downtrend likely caps the move; failure there sends price back under 3,000.
• Breakdown Case (≈15%): Immediate loss of 2,912/2,887 leads to a fast extension to 2,860 and maybe a tag of 2,800–2,820 if liquidity is thin.

Trade Plan Logic (Sell-the-Rip)

• Rationale: Dominant daily/4h downtrend, broken 3,025/3,000 support turned resistance, bearish MACD and MA posture, volume distribution, and a likely wave-4 type pause before one more leg lower. Hourly oversold favors an entry on a bounce rather than chasing.
• Entry Zone: 2,990–3,020 (pivot S2/S1 band and 61.8% retracement cluster). Optimal single-price entry: 2,998.
• Target: 2,878 (just above daily S3 ~2,887 and ahead of 2,860 node), capturing the likely next leg lower while front-running deeper supports.
• Risk/Invalidation (informational): A sustained reclaim and hold above 3,060–3,080 (hourly close-and-hold) would threaten the setup; above ~3,120 invalidates the near-term short thesis and risks a push to 3,160–3,190.

Indicator-by-Indicator Impact Summary

• Moving Averages (20/50/200D): Bearish stack → press rallies.
• RSI/Stoch: Hourly oversold bounce likely; daily not oversold → room lower after bounce.
• MACD: Bearish cross and widening histogram → favors continuation.
• Bollinger/Keltner: Near lower bands → bounce risk, but trend still down → sell-the-rip bias.
• Fibonacci: 61.8% lost (3,025) and price hovering over 78.6% (2,912) → deep retrace; losing 2,912 opens 2,860–2,800.
• Ichimoku: Below Tenkan/Kijun/Cloud → trend-following shorts preferred.
• Pivots: Below S2; resistance cluster at 2,990–3,020 → ideal entry zone for shorts.
• Volume/OBV/VPVR: Distribution and broken 3,000 shelf; next shelf 2,850–2,900 → target area aligns with profile.
• Pattern/Structure: Bear flag after impulsive drop; typical resolution one more leg down.

24-Hour Price Path Projection

• Likely path: Early bounce 2,980–3,015 → rejection near 3,000–3,025 → slide to 2,900–2,885 → modest end-of-window stabilization 2,890–2,920.

Bottom Line

• Bias: Sell rallies. Probability-weighted expectation is a bounce that fails near 3,000–3,025 and a subsequent push toward 2,880–2,900 within 24 hours.