ETH/USD Daily Chart (Coinbase) – Source: TradingView
An ascending triangle has formed as a result of this behavior. This structure has a slight bullish bias as it indicates that buyers are raising the floor price and could eventually gather enough strength to push the price above this sell wall.
The Relative Strength Index (RSI) has been on an uptrend as well, but momentum has weakened as a result of today’s drop. If the oscillator drops below the mid-line, that would mean that bears are in control once again.
A break below the trend line support could push ETH to $2,700 in the near term, meaning a 16% downside risk.
In contrast, if we get a break above the 200-day EMA, which currently sits at $3,335, ETH may be getting ready to make a strong move back to $4,000, aided by increased network usage and rising volumes.
To sum up, even though on-chain data favors a bullish outlook, technical indicators are not there yet. Once they get there, the next explosive move could be right around the corner.