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So far in September, Ethereum has presented both bullish and bearish arguments. At the beginning of the month, ETH rose nearly 30% to a 16-week high of $4,025 and set its sights on a new ATH. However, a larger sell-off on September 7th fueled an abrupt end to its rally and triggered an immediate 25% drop.
At press time, the market was still reeling from the aftereffects of this decline, as ETH was unable to break through certain resistance levels. Furthermore, the lower trendline had been broken, implying that a downtrend was in play.
With some proponents calling for a bearish return to late-July levels, ETH looked to be under the pump to prove its cynics wrong. Luckily, expectations of a bear market might just be unreasonable at the moment since ETH has been trading above some important price levels. However, immediate recovery is still a long shot.
At the time of writing, ETH was valued at $3,077 after noting a bullish comeback over the last 24 hours.
Ethereum Daily Chart
Taking recent losses into account, ETH, at press time, was trading at a near 30% discount compared to its May record high. Considering the fact that ETH is yet to close below the important support level of $2,650 and its daily 200-SMA (green), calling for a bear market is indeed premature.
A resistance range of $3,660-$4,016 is all that stands between ETH and a new ATH on the chart.
While this may appear to be a small mountain to climb, it is riddled with several short-term obstacles. For example, the visible range indicated that ETH attracted a large number of trades between $3,000 and $3,500. This means that bulls would have to exert considerable pressure to push ETH above $3,500.
The price has yet to decisively close above $3,000 as well. A bearish spinning top or a doji candle would indicate a potential return to the 200-SMA. A breakdown is also possible as a result of the same. Finally, the upwardly sloping trendline turned bearish and has yet to be retested.
ETH’s indicators flashed bearish readings as well. The RSI, MACD, and Awesome Oscillator were on the precipice of extending below their half-lines – A development that discourages speculation from bullish traders. This also meant that sellers were in control of the market and any gains would only be momentary.
To overturn these readings, ETH needs to close above $3,500 backed by strong volumes. This would increase the chances of reclaiming $4k.
The ETH market played more favorably for sellers, rather than buyers. Traders must wait for ETH to close above $3,500 on healthy volumes before taking up any long positions.
Until then, ETH would be at the risk of some more drawdowns.