ETH/USD remains on track for a new all-time high, but a move below $3,800 could trigger a reversal to the $3,500 area.
ETH price is hovering around $3,856 at the time of writing, with bulls enduring the second day of bearish pressure that capped its latest rise. The downward pressure threatens to push the ETH/USD pair lower, which could see the bears establish the $4,000 area as their main supply wall.
Notably,Ethereum ‘s price peaked at $4,030 on crypto-currency exchange Coinbase on September 3 and reached a daily close of $3,940 – the highest close since May 14. As Bitcoin (BTC) looks to strengthen above $52,000, a similar move for ETH could put a rise toward the all-time high in play.
According to renowned technical analyst Rekt Capital, the bullish view for ETH is supported by the possibility of a “U” shaped 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’s price outlook
Ethereum’s breakout from the $4,000 level followed a bullish flag formation on the daily chart. The break above the resistance line around $3,330 saw the bulls reach the $4,030 high.
Although profit taking has seen prices fluctuate below $3,900, the technical picture suggests that the bullishness still has the upper hand. We have the daily RSI with a positive divergence and near overbought territory, while the daily MACD is in the bullish zone.
If ETH/USD holds above $3,832 (yellow horizontal line), a quick bounce could include a break above the $3,950-$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 could drop to the 20 EMA line currently located at $3,529. In the event of a prolonged short-term decline, bulls could look to defend the gains at the horizontal anchor near $3,330.