The fortification of Ethereum’s price on a key level can lead to a fall. What are the traders’ current expectations regarding the future development of Ether’s market?
One of the scenarios that we have predicted earlier has come into fruition. Ether’s price is fortifying at a key technical level of $11.5. Most bulls see that mark as the peak of a correction toward the upward trend which has started at $8. That’s why the price has stopped falling and remains near that level. However, the resulting flat indicates that there is a counterforce from the bears. The resulting balance between the bears and the bulls may result in an ultimate continuation of the decline.
The fact that the level of $11.5 is perceived by most bulls as the peak of a correction is also confirmed by a large volume of buy orders in that area, as well as by the growth of volatility. According to the Poloniex exchange, the number of buy orders at the bottom limit of the flat at $11.5 is almost twice as high as the number of sell orders at the top limit, near $12.
So far there seems to be more support for the upward trend, than for a downward one. As we can see from the volume, most traders expect a continuation of growth.
Everything depends on the upcoming reaction of the price at the limits of the flat: $11.5 - $12. In order for it to start growing again, it has to pass the level of $12; that is, Ether’s price has to fortify near $12. That will indicate that the bulls have a clear advantage over the bears. For a more confident upward movement, we need to see the formation of a turning wave at that mark.
The upper limit of the flat at $12 is the minimal peak of a correction towards the downward movement which has started at $14.5. That is confirmed by the diagonal channel and the accumulated sell order volume at that mark. If the price reaches the diagonal channel, it will complete the downward structure which began forming at $14.5. That way, there will be a chance for a larger-scale trend to form. However, for the downward scenario to be confirmed, the price has to break through the bottom limit of the flat at $11.5. A fortification and formation of a turn will indicate that the bears are holding a clear advantage. Such a situation may provoke a more powerful fall.
Ethereum Classic’s inability to fortify at $1.2 has provoked a new fall. However, the drop was a short one. After a small flat near $1, ETC has gained significant support from the bulls. At the moment, the current upward impulse is still a correction toward the medium-term downward trend which has started at $1.5: the price has yet again rebounded from the key level of $1.2.
Judging by the traders’ expectations, the amount of sell orders exceeds that of buy orders. That’s why the most likely scenario at the moment is a flat between $1 and $1.2. Given that the downward trend’s structure hasn’t been broken yet, the likelihood of the downward movement is much higher. In order for the decline to continue, Ethereum Classic’s price has to break through a key level at $1. A large volume of buy orders is concentrated at that mark. A fortification there can provoke a new fall. In order for the trend to turn upward, the bulls have to show a clear advantage over the bears by fortifying at $1.2. In that case, the price will have a good chance to form an upward trend towards the next key level.
Key technicals, where a change of trends is most likely to happen:
- In order for Ethereum to form a trend in one direction or another, the price has to break through either of the limits of the flat: $11.5 or $12.
- Before Ethereum Classic forms a turn and starts growing, it has to fortify and form a turning wave at $1.2.