Ethereum Price Analysis: With A Pennant Breakdown, Will ETH Price Float Above $1600?

As predicted in our last ETH price analysis, the ETH prices fail to rise above the $1700 mark, leading to a bearish continuation. With a 2.53% drop, Ethereum breaks into the demand block above $1600.

Entering deep into the previously demand-marked territory, the ETH price action displays lower price rejection with long tails. Becoming a lucrative asset at a discounted price, Ethereum finds a short recovery phase as sellers also get exhausted.

Breaking the short-term support trendline, the ETH price action falls to $1581 before the buyers step in to push the closing at $1634. With high demand at lower levels, Ethereum may find some chances to avoid further downfall.

Currently, ETH price trades at $1640 with an intraday gain of 0.37% following the 2% drop last night.

Open Interests On A Downhill

Open interest is the number of outstanding contracts (both long and short) on a particular derivative instrument. When open interest increases, it means that more people are betting, which can lead to more volatility and liquidity. This generally means the continuation of the set trend.

However, as Ethereum’s Open Interest (OI) decreases from $5.125 billion to $3.604 billion, it means investors are closing their futures positions. This could cause a short squeeze, which is a sudden price movement in the positive direction.

Will Ethereum Prices Find A Recoil Rally?

Despite the recent fall, the ETH price action highlights the lower price rejections from the $1600 demand block. Moreover, the technical indicators reflect a solid buying pressure present to absorb the supply inflow.

Ignoring the downtrend in the 4H chart, the daily RSI line maintains a positive trend reflecting a bullish divergence. It even highlights a solid buying pressure at the $1600 demand block. Furthermore, the MACD indicator also showcases a bullish divergence but struggles to sustain the positive alignment.

Therefore, the 4H chart gives a bullish Ethereum price prediction with a recoil recovery from $1600. With initial targets at $1700 and $1790, the uptrend may soon retest the broken support trendline.

On the flip side, in case of a $1600 breakdown, the Ethereum price can challenge the psychological mark of $1500.