Ethereum’s native token, Ethereum (ETH), appears to be poised for a sharp upward pullback in the coming weeks after painting what’s called a “double doji” pattern, accompanied by several bullish technical indicators.
Merging Strong Ether Support with Doji
Recall that a doji is a candle that is formed when a financial instrument opens and closes at approximately the same level in a certain period of time, whether it be hourly, daily or weekly. From a technical point of view, the doji represents indecision in the market, that is, the balance of power between bears and bulls.
Thus, if the market is trending lower when a doji appears, traditional analysts see it as a sign of slowing selling momentum. As a result, traders may view doji as a sign of existing short positions, or open new long positions in anticipation of a price reversal.
Meanwhile, a double doji shows an ongoing state of conflicting bias among traders, which could lead to price breakouts in either direction.
As ETH/USD forms a similar pattern on the weekly chart, the token looks poised for strong trend-setting moves in the coming sessions.
Some Ethereum technicals are in favor of a decisive rebound, starting with its 200-week exponential moving average (200-day EMA; blue wave in the chart above) around $1625, which served as a strong support level in May 2022.
Ether then gets another specific price floor in the $1,500 to $1,700 range, which was instrumental in limiting the token’s bearish efforts between February and July 2021. Combined with the double doji, these technical indicators predict a price bounce in the future.
50% ETH Growth Ahead?
If the price of ETH retracements as described above, then the next bullish target is the 0.5 Fibonacci line (around 2120) of the Fibonacci retracement chart drawn from the $85 swing low to the $4300 swing high.
This would mean a 20% move up. Meanwhile, a sustained move above the 0.5 Fibonacci line could see traders view the 0.382 Fibonacci line near $2,700 as their next upside target, a level coinciding with ETH’s 50-week EMA (red wave) by the end of September 2022 of the year.
It will be almost 50% price increase.
3 Reasons Ethereum Price Holds Below $2,000
Conversely, if the Double Doji pattern resolves on a break below the support range, it could push Ether towards $1,400. This level coincides with ETH’s 2018 high and played an important role as support in February 2021 as shown below.
A decisive break below $1,400 then opens the door to the 0.786 Fibonacci line near $1,000 as the next downside target.
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Credit : cointelegraph.com