ETH/USD remains on track for a new all-time high, but a flip below $3,800 could trigger a reversal to the $3,500 zone
ETH price is hovering around $3,856 at time of writing, with bulls experiencing the second day of bearish pressure that has capped its latest upside. The downward pressure threatens to push the ETH/USD pair lower, which might see bears establish the $4,000 zone as the main supply wall.
Notably, Ethereum price reached a high of $4,030 on the crypto exchange Coinbase on 3 September and achieved a daily close of $3,940 — the highest close since 14 May. As Bitcoin (BTC) looks to strengthen above $52,000, a similar move for ETH could bring into play an upside towards the all-time high.
According to popular technical analyst Rekt Capital, the bullish view for ETH is supported by the possibility of a "U-shaped" pattern formation.
$ETH is in the process of retesting the top of its multi-month U-Shaped formation
Successful retest will validate the formation to bring upon a new macro uptrend into new All Time Highs#Crypto #Ethereum
— Rekt Capital (@rektcapital) September 6, 2021
Ethereum price outlook
Ethereum's breakout to the $4k level followed a bull flag pattern formation on the daily chart. The breakout above the resistance line around $3,330 saw bulls rally to the $4,030 high.
Although profit-taking deals have seen prices fluctuate below $3,900, the technical picture suggests bulls still have the upper hand. We have the daily RSI trending with a positive divergence and near the overbought territory, while the daily MACD is in the bullish zone.
If ETH/USD holds above $3,832 (yellow horizontal line), a swift rebound could include a breakout above the $3,950 to $4,078 price range. Bids above the $4,080 supply wall could allow buyers to push ETH/USD towards the $4,400 level.
ETH/USD daily chart. Source: TradingView
On the downside, a break below the $3,832 line could call for more selling. In this case, Ethereum's price might decline to the 20 EMA line currently located at $3,529. If there's an extended downside in the short term, bulls could seek to defend gains at the horizontal anchor near $3,330.
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