The Ethereum (ETH) price has been declining since reaching a high of $416 on August 2. While it has made several attempts to move upwards, they’ve been generally weak, creating multiple bearish divergences.

It’s possible that ETH has reached a top and a corrective period will soon ensue.

The Ethereum price has been increasing since March 13. During the week of July 27 – August 4, the price rallied to close above $366, which is the 0.382 Fib level from the entire decline that began in April 2019.

If the price successfully confirms this level as support, the next resistance area would be found between the 0.5 – 0.618 Fib levels, at $455 – $544. If the current move is an upwards correction with regards to the previous downward move, the rally should end near this level.

Technical indicators on the weekly time-frame are still bullish. Both the MACD and RSI are increasing, and there is no bearish divergence yet. However, the latter has reached the overbought zone, indicating that the move is overextended, and the upside could be limited.

Cryptocurrency trader @Damskotrades stated that the Ethereum price could increase all the way to $484. Their target is right between the 0.5 – 618 Fib levels outlined previously, so it’s possible that the price will reach it, at least based on the weekly time-frame.

Despite the bullishness on the longer-term time-frames, the daily chart shows considerable weakness. After creating a long-legged doji on August 2, the Ethereum price has since formed bearish divergence on the RSI.

In addition, the MACD has begun to fall, indicating a decrease in the bullish momentum. This is a sign that the rally is coming to an end.

If the price begins to fall, The closest support levels would be found at $316, $292, and $258, the 0.5, 0.618, and 0.786 Fib levels of the entire upward move. The 0.5 and 0.786 levels are also supported by the 50 and 200-day moving averages (MA), respectively.

A daily close below $372, which was the close on August 2, would indicate that the price has begun its correction.

The shorter-term chart supports this possibility. The price seems to be trading inside a descending triangle, with support at $372. Volume has been notably higher during bearish candlesticks than during their bullish counterparts.

Furthermore, there is no bullish divergence in either the short-term RSI or MACD. If the price loses the support area, it could initiate a rapid decline.

As for the wave count, the price has likely begun a five-wave impulsive pattern formed at the beginning of March. It currently seems to be in the fifth and final wave (black). The fifth wave has become extended, and can be outlined with five sub-waves inside it (blue).

Furthermore, the fifth sub-wave has also become extended, containing another five sub-waves inside (brown). Whenever a wave extends, the same numbered sub-wave inside it can also extend, so this isn’t unusual.

The August 2 top was extremely close to the 1.618 Fib level of waves 1 – 3, so it’s a likely place for the move to end. Furthermore, it is close to the 0.382 Fib of the entire upward move (as outlined in the first section), and the multiple divergences support the creation of a top.

A daily close above $400 would invalidate this particular wave count.

To conclude, the Ethereum price has possibly reached a top, and could soon begin a corrective period towards the Fib support levels outlined above.

The post Ethereum Struggles to Reach a Close Above $400 appeared first on BeInCrypto.

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