Ethereum (CRYPTO: ETH) was falling over 4% at one point on Friday as inflation fears, the likelihood of rising interest rates and Ukraine/Russia news continues to spook the markets.
Gold, considered a safe-haven asset, has been rising steadily in comparison, which indicates in times of economic uncertainty. Cryptocurrencies are still considered risky, despite many arguing cryptos such as Bitcoin (CRYPTO: BTC) would replace physical metals as the most popular asset class.
Bitcoin was performing better than Ethereum on Friday, trading mostly flat in consolidation after a bearish day on Thursday dropped the cryptos 7.65% and 7.39%, respectively, over the course of the 24-hour trading period.
Despite the risk, Ethereum may have a pivot point coming up if the crypto continues to drop and traders can watch for a reversal candlestick to print at the level, if the pattern is recognized.
The Ethereum Chart: On Feb 6, Ethereum broke up bullishly through a descending trendline that had been holding the crypto down since it reached a high near the $4,780 level on Dec. 1, 2021. The break of the pattern triggered about an 8% move to the upside but when Ethereum failed to make a higher high on Feb. 16, the uptrend was negated, which gave the bears control.
Ethereum may find support if it backtests the trendline again, however, because when the crypto tested the area as support on Feb. 11, Feb. 12 and Feb. 13 it bounced up from it. Bullish traders not already in a position could watch for Ethereum to print a doji or hammer reversal candlestick above the trendline as an entry signal, with a stop below the level.
On Friday, Ethereum was working to print a bearish Marubozu candlestick on the daily chart, which indicates lower prices may come on Saturday. Friday’s trading volume was also higher than average, which indicates the bears are currently in control.
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- Bulls want to see Ethereum reverse course at or above the descending trendline and then for big bullish volume to come in and push the crypto back up above the Feb. 15 high of $3,119. There is resistance above at $2,890 and $3,057.82.
- Bears want to see sustained big bearish volume drop Ethereum down below the descending trendline, which will indicate the break up from the area was a bull trap. There is support below at $2,609.02 and $2,461.63.
