ETH reached the main resistance range $370-400.
Despite the DeFi market growth to locked $6.5 billion, ETH fell by 10% last week. The weekly candle closed at $390, keeping a critical yellow price zone. The last time buyers tried to control the range $700-400 was in May 2018. However, at the second attempt in August 2018, sellers managed to take control of this range for a long time. For the last two years it is actually the third attempt by buyers to break the global down trend and start a new era of Ethereum. Closing the weekly candle at $390, sellers got a chance to try to continue consolidation in the wide range $85-400 (a good range of consolidation). Although, there is a little chance to see even $240 for ETH in the near future.
The prospect of uncorrected ETH growth continuation to $800.
First of all, trading volumes during the Ethereum price growth from March 2020 are quite high, which reflects the interest of investors. If we pay attention to how sellers behaved at the time of buyers depletion in the period June-July 2020, it becomes clear that there is no strength or enthusiasm to push the price down:
As we see low volumes and sluggish candles indicate the inaction of sellers. The price growth in the Ethereum market since the end of July was quite bright. The current price stop is more like fixing over an important price range in order to continue the growth of the coin. Therefore, despite the price fall over the past week, the growth potential of ETH with a target $800 remains the main scenario.
An alternative scenario is possible below $370.
The only chance for sellers is to fix below $370 during the next month. Negative news about Ethereum 2.0 can help with it. In this case, the first serious target will be in the range $225-250.
The daily timeframe clearly shows that good liquidity has formed in this price zone, after a 2-month consolidation:
The first local target on the way to the range $225-250 is the mark $325. The sellers’ counterattack on increased volumes on 2 August, was neutralized in this price range. As we can see, buyers aggressively bought this coin. Therefore, in our opinion, the trend reversal is possible only through long-term consolidation under the mark $370.
If we lay over Fibonacci grid on the current growth wave from March 2020, we see that the first serious support level coincides with the price range $225-250:
Nevertheless, it is in case if the growth wave correction will begin. At the moment, there are no clear signals from sellers. Therefore, the worst-case scenario at the moment is the continuation of consolidation in the Ethereum market in the range $370-450.
Charts courtesy of Trading View