Ethereum [ETH] lost a third of its value after reversing from its six-month trendline resistance in mid-September (white, dashed). The subsequent drop below the 20 EMA (red), 50 EMA (cyan), and 200 EMA (green) placed the altcoin on a bearish path.
If the $1,275 support holds firm, it may invalidate the likely bearish bias. ETH was trading at $1,294.8 at the time of publication.
ETH witnessed a symmetrical triangle, is a breakout due?
Source: TradingView, ETH/USDT
The recent price movements chalked out a symmetrical triangle-like setup after a steep downtrend in the four-hour timeframe. More often than not, a symmetrical triangle acts as a continuation pattern. Consequently, a decline below the lower trendline of the triangle could expose the crypto to a near-term decline before a lift-off.
This decline could induce a retest of its first major support level in the $1,240 support zone. The buyers could then most likely strive to look for a near-term rebound. Furthermore, the 20/50 EMA bearish crossover reinforced a slight selling edge.
But an immediate break above the EMA barriers followed by the upper trendline of the triangle could invalidate the bearish inclinations. In this situation, the potential targets would lie near the 200 EMA and the $1,387 zone.
The Relative Strength Index (RSI) depicted a slight bearish edge after its decline below the equilibrium. Nonetheless, its lower troughs bullishly diverged with the price action. On the other hand, the Chaikin Money Flow (CMF) continued to depict a bullish edge by maintaining its sport above the zero mark.
Improved funding rates
Source: Santiment
Over the past week, ETH’s funding rate on Binance turned positive as a reflection of the increased bullish sentiment in the futures market. On the other hand, its rate on FTX was slightly below the 0% mark.
Should it continue to progress on the track to become positive, the near-term sentiment could aid the buyers in invalidating the bearishness.
Last but not least, investors/traders must watch out for Bitcoin’s [BTC] movement. This is because ETH shared a 40% 30-day correlation with the king coin.
