Ethereum (ETH) Price Breaks Down After Network Upgrade

Ethereum (ETH) price is trading slightly above an important resistance at $1,664. Retrieving it would be a positive signal for future price.

ETH is the native token of the Ethereum blockchain created by Vitalik Buterin. After the release of Ethereum 2.0, it moved to a Proof-of-Stake (PoS) consensus mechanism. Ethereum developers launched the Shanghai and Capella forks on the Zhejiang testnet on February 7th. They launched at 1350 epoch and will improve the Ethereum network execution and beacon chain consensus layers.

Despite the network upgrade, futures traders are betting on a decline as more and more of them are switching to shorts.

The price of Ethereum has reached a critical level

Ethereum price has risen sharply since it broke above the descending resistance line on January 11. The increase reached a high of $1,712 on 2 February. However, ETH token price formed a Shooting Star candlestick (red icon) which validated $1,664. level as resistance. This is an important resistance area as it is the 0.618 Fibonacci retracement resistance level and a horizontal resistance area.

However, Ethereum price found its footing and is making another breakout attempt by forming a bullish candlestick on February 7th.

The daily RSI reading is very interesting. It looks like ETH price broke above its bearish divergence trend line (green). If so, a retest of the $1,664 resistance area and a move towards $2,000 are possible.

On the other hand, there could be another rejection from the resistance area towards the nearest Fibonacci support at $1,461.

Ethereum (ETH) price movement
ETH/USD Daily Chart. Source: TradingView

Short-term patterns are important for future trends

Technical analysis on the six-hour time frame shows that ETH price has been trading inside an ascending parallel channel since January 18. Even though such channels are considered to be bearish patterns, the price is trading to its upside, allowing for upside potential. a breakout.

Since the channel coincides with an important resistance zone on the daily time frame, whether ETH price breaks out of it or moves below it could determine the future trend.

Ethereum (ETH) short-term movement
ETH/USD Six-hour chart. Source: TradingView

To conclude, the direction of future movement of Ethereum is still unclear. This will be crucial in determining whether the price breaks out of the current pattern or turns down. A break above could lead to the $2,000 high, while a breakdown could lead to a retest of $1,461.

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