Ethereum price is reaffirming a crucial bullish stance that could lead to a rally above USD 2,000, with USD 2,220 as a near-term target. But first, the most prominent smart contract token needs to weaken buyer congestion around $1,950.
Such a move would serve as confirmation that ETH is finally ready to extend its leg above USD 2,000 and close the gap towards USD 3,000.
Could Ethereum Cost $2,000 This Week?
The price of Ethereum is about to validate a substantial breakout, with the possibility of pushing it above $2,000 before the weekend. An inverted head and shoulders (H&S) pattern, which completed its formation in late June, could fuel a 15.5% move towards $2,200.
The inverted H&S is often seen as a strong bullish indicator. It is characterized by three distinct troughs, the deepest one forming the ‘head’ and the two higher ones forming the ‘shoulders’. The pattern indicates a possible reversal in a downtrend, as seen with the Ethereum price on the four-hour chart.
Traders who accurately recognize this pattern place buy orders strategically above the “neckline” of the pattern – which currently stands at $1,920 for ETH. This breakout often marks the end of bearish sentiment and the beginning of a new bullish era.
It is recommended to place the stop loss slightly below the neckline with the breakout or to take the profit target equal to the height of the pattern from the neckline to the head – extrapolated from the breakout point.
Four Hour ETH/USD Chart | Trade view
Meanwhile, Ethereum price remains slightly above its immediate support, provided by the 50-day exponential moving average (EMA) (line in red). Traders looking to take new long positions may want to wait for ETH to gain support above the inverse H&S neckline resistance to gain confidence in the incoming price rally.
According to the Money Flow Index (MFI), investors are starting to lean towards a bullish result after the retracement since Monday, from $1,980 to $1,895. As the MFI index recovers toward overbought territory, momentum behind Ether would build, spreading a much-needed break past the $2,000 psychological level.
The Moving Average Convergence Divergence (MACD) indicator may flash another buy signal during the Thursday and Friday sessions. This call for investors to buy ETH would come into focus, with the MACD line in blue crossing above the signal line in red.
Moreover, the position of the momentum indicator above the average line suggests that Ethereum price is done with the correction and bulls are ready to take the reins.
Traders can prepare for sudden pullbacks by looking out for Ethereum’s reaction to the $1,920 neckline resistance and subsequent $1,950 hurdle. A sustained position above either of these two levels would mean bulls are still in play and traders can maintain their long positions.
If support at the 50-day EMA bows to selling pressure, the MACD will slide into negative territory, extending the bearish route into the weekend. Ethereum may seek relief from selling pressure starting with the next support at $1,884 (the 100-day EMA) and $1,858 (the 200-day EMA).
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John is a renowned crypto analyst and journalist, providing expert insights into both broad and focused aspects of the digital asset market. As a steadfast reporter, he keeps his audience abreast of the latest crypto news, delving into topics such as price trends, on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the ever-evolving metaverse.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
This post Ethereum price could turn parabolic with this bullish pattern; Buy now or wait?
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