ETH Price

Ethereum ‘double Doji’ pattern hints at a 50% ETH price rally by September

ETH’s bullish reversal candlesticks form near a strong support confluence, raising anticipations about a sharp upside retracement ahead.

Ethereum’s native token, Ether (ETH), looks poised to undergo a sharp upside retracement in the coming weeks after painting a so-called “double Doji” pattern, accompanied by a few bullish technical indicators.

Ether strong support confluence meets Dojis

To recap, a Doji is a candlestick that forms when a financial instrument opens and closes around the same level on a specified timeframe, be it hourly, daily or weekly. From a technical perspective, a Doji represents indecision in the market, meaning a balance of strength between bears and bulls.

So, if a market is trending downwards when a Doji appears, traditional analysts view it as a sign of slowing selling momentum. As a result, traders may look at a Doji as a sign to existing their short positions or open new long positions in anticipation of a price reversal.

Meanwhile, a double Doji shows a continued state of bias conflict among traders, which could result in the price breaking out in either direction.

With ETH/USD forming a similar pattern on its weekly chart, the token looks ready to log strong trend-defining moves in the coming sessions.

*ETH/USD weekly price chart featuring two Doji formations in a row. Source: TradingView*

Some of Ether’s technicals favor a decisive rebound move, beginning with its 200-week exponential moving average (200-day EMA; the blue wave in the chart above) near $1,625, which has served as a strong support level in May 2022.

Next, Ether gets another concrete price floor in the $1,500–$1,700 range, which was instrumental in capping the token’s bearish attempts between February and July 2021. Coupled with a double Doji, these technical indicators anticipate a price rebound ahead.

A 50% ETH rally ahead?

If ETH price rebounds as described above, then the next bullish target is the 0.5 Fib line (near 2,120) of the Fibonacci retracement graph, drawn from the $85-swing low to the $4,300-swing high.

*ETH/USD weekly price chart featuring Fib support and resistance targets. Source: TradingView*

That would mark a 20% upside move. Meanwhile, an extended move above the 0.5 Fib line could have traders eye the 0.382 Fib line near $2,700 as their next upside target, a level coinciding with ETH’s 50-week EMA (the red wave), by the end of September 2022.

This would be a nearly 50% price rally.

Conversely, if the double Doji pattern resolves in a breakdown below the support range, it could push Ether toward $1,400. This level coincides with ETH’s 2018 top and was instrumental as a support in February 2021, as shown below.

*ETH/USD weekly price chart. Source: TradingView*

A decisive breakdown below $1,400 then opens the door to the 0.786 Fib line near $1,000 as the next downside target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

3 reasons Ethereum price risks 25% downside in June

A mix of on-chain, fundamental and technical factors suggests more pain for Ether bulls ahead.

Ethereum’s native token Ether (ETH) has dropped more than half of its value in 2022 in dollar terms, while also losing value against Bitcoin (BTC) and now remains pinned below $2,000 for several reasons.

What’s more, ETH price could face even bigger losses in June due to another slew of factors, which will be discussed below.

Ethereum funds lose capital en masse

Investors have withdrawn $250 million out of Ethereum-based investment funds in 2022, according to CoinShares’ weekly market report published May 31.

The massive outflow appears in contrast to other coins. For instance, investors have poured $369 million into Bitcoin-based investment funds in 2022.

Meanwhile, Solana and Cardano, layer-one blockchain protocols competing with Ethereum, have attracted $104 million and $9 million, respectively.

*Flow into/from crypto funds (by assets). Source: CoinShares/Bloomberg*

The withdrawals from Ethereum funds are a sign of how the recent crash in TerraUSD (UST) and Terra (LUNA) — tokens within Terra’s algorithmic stablecoin ecosystem — has dampened interest in the overall decentralized finance (DeFi) sector.

ETH’s bullish prospects remain glued to anticipations of a boom in the DeFi market, because Ethereum’s blockchain host a majority of financial applications in the sector. As of June 5, the total valued locked (TVL) inside the Ethereum-based apps was $68.71 million, almost 65% of the total DeFi TVL.

*Ethereum TVL as of June 5. Source: DeFi Llama*

But, the TVL still reflects a massive retreat from Ethereum’s DeFi pools, which, before the collapse of Luna Classic (LUNC) and TerraUSD Classic (USTC) on May 9, was hovering around $100 billion.

With macro risks led by the Federal Reserve’s hawkish policies, coupled with a cautious outlook around the DeFi sector, Ether looks poised to continue its decline in June, according to Ilan Solot, a partner at Tagus Capital.

He told the Financial Times:

“If the Federal Reserve is tightening, the world is in recession, and people need to pay $4.5 per gallon of gas, they’ll have less to invest in DeFi or spend on blockchain games.”

Sluggish technicals

Trading behavior witnessed since May also paints a bearish outlook for Ethereum.

In detail, Ether has been fluctuating inside a range defined by a horizontal trendline support and a falling trendline resistance. The pattern looks more or less like a “descending triangle,” a bearish continuation pattern when formed during a downtrend.

As a rule of technical analysis, descending triangles resolve after the price breaks decisively below their support trendline and then falls by as much as the triangle’s maximum height. Ether risks undergoing a similar downside move in June, as shown in the chart below.

*ETH/USD daily price chart featuring ‘descending triangle’ setup. Source: TradingView*

If ETH’s price breaks below the triangle’s lower trendline, it risks falling toward $1,350 in June, down about 25% from today’s price.

ETH reserves on exchanges are increasing

The total number of Ether balances at crypto exchanges globally has increased by 550,459 ETH since May, data from CryptoQuant shows.

That amounts to almost $950 million worth of inflows into the exchanges’ hot wallets since the beginning of the Terra debacle.

*Ethereum exchange reserves. Source: CryptoQuant*

Typically, traders send tokens to exchanges when they want to trade them for other assets. Thus, selling pressure would likely increase if the downtrend in ETH reserves on exchanges begins to reverse.