A reversal is expected in Ethereum (ETH) cryptocurrency market, as ETH/USD has consolidated above the support barrier around $ 4,000. Therefore, the coin should rise in price to $ 4,300 by December 29.
Traders started pumping Ethereum price on December 20, and in 12 hours ETH went up by 8%. Three factors point to the continued bullish trend in the medium term. First, the coin’s rate has broken through the contracting triangle, which has been forming since December 1. Secondly, the price of the asset is fixed above the exponential moving averages of EMA Ribbon indicator. Thirdly, the cost of cryptocurrency remained in the range above the 38.2% Fibonacci level, taking into account the pump, from $ 2,650 to $ 4,865.
These facts indicate that ETH price will increase to $ 4,300 and reach 23.8% Fib. A downtrend will occur if during the next session the value of an asset falls below $ 4,000. In this case, the coin could fall in price to a strong support barrier at $ 3,760. However, judging by the current data, the probability of a dump without correction to $ 4,300 is extremely small.
The downtrend ended within the fourth wave of the bullish trend that started in July. According to the wave theory, ETH rate should up during the fifth wave and renew its ATH. But one factor raises concerns for a bright future for the digital asset. The bottom of the fourth wave was significantly lower than the peak of the first wave, which speaks in favor of the continuation of the downtrend. In addition, during the last correction, the trading volume decreased, and the cryptocurrency rate did not exceed 23.6% Fib, taking into account the pump, from $ 1,700 to $ 4,865.
A head and shoulders pattern is forming on the chart. If the pattern is completed, then within a month the rate of the coin will drop to the neck level ($ 2,600-2,700), then it will correct to $ 4,000 (right shoulder) and collapse downward. After the neck is broken, Ethereum value will fall by an amount equal to the head’s height. That is, the rate of the coin can be reduced to $ 390.