- Ethereum price has come close to retesting the $1,731 support floor.
- A bounce off this barrier could trigger ETH to rally at least 16%.
- If sellers produce a four-hour candlestick close below $1,701, it will invalidate the bullish thesis.
Ethereum price has been on a downtrend for roughly four days and is currently approaching a support level. The price action over the last ten days suggests the possibility of a reversal pattern that forecasts gains for ETH.
Ethereum price prepares for an explosive move
Ethereum price coiled above the $1,910 support level between May 13 and May 25. On May 26, the sell-off pushed ETH below the said barrier, leading to a 10% move that set a swing low around the $1,731 support floor.
As buyers scooped the smart contract token at a discount, Ethereum price rallied 18% and set an equal high at $2,020. While this upswing was bullish, it was brief, triggering a reversal that plummeted ETH.
Now, Ethereum price is trading just above the $1,731 support level again, hinting at a W-bottom formation. This technical pattern is a reversal setup that indicates a trend change favoring the bulls.
Therefore, investors can expect ETH to rally at least 16% to sweep the equal high at $2,020. If buyers continue to bid, then the local top could form around the May 16 swing high at $2,164.
This run-up would constitute a 26% gain, but in a highly bullish case, Ethereum price could retest the high time frame resistance barriers at $2,341 or $2,412 after a 41% ascent.
ETH/USDT 4-hour chart
Regardless of the bullish narrative, if Ethereum sellers produce a four-hour candlestick close below $1,701, it will create a lower low and invalidate the W-bottom setup along with the bullish thesis. In such a case, Ethereum price might revisit the $1,543 support level.