The daily price chart for Ethereum shows an interesting setup. Depending on how you look at the chart, the price action in the last one week has been consolidating, but is found within the confines of two trendlines that delineate a symmetrical triangle. If price action from much earlier is to be considered, then we can say that ETHUSD is in a bearish pennant pattern.
ETHUSD is presently trading at 216.32, and is up nearly $6.50 on the day on the back of BTC’s price gains. However, ETHUSD is presently testing the upper border of the bullish flag and may test the R2 daily pivot at 218.16, having broken the R1 pivot of 213.15 earlier in the day.
A break of the R2 pivot may open the door for further upside movement above the 220 level. A break above 227 will invalidate the bearish pennant setup. If price is resisted at 218 to 220, this will open the door for a retest of the lower border of the pennant, where a chance of a break may occur if price has enough downside momentum below 200.
ETHUSD seems to be running out of steam as the daily chart is showing a gradual reduction in trading volumes. This will favour the resolution of the bearish pennant in favour of the bears. Therefore, the trade setup to watch out for is for the price candles/bars to break below the lower border of the pennant with a 3% downside penetration.