Since November 3, Ether has been consolidating and forming a bullish pennant technical pattern. This technical figure is a sign of a probable strong bullish move that could push ETH to the psychological level of 5,000 in the next few days.
On the contrary, as Ethereum consolidates below the 21 SMA, it is likely to continue the correction movement and could eventually weaken to the support of 6/8 murray around 4,375. A sharp break and a daily close below this support zone could accelerate the decline to the 200 EMA around 3,991.
The optimism and euphoria of the cryptocurrency market faded when on November 4, US Federal Reserve Chairman Jerome Powell confirmed that the central bank would begin to reduce its monetary stimulus, So, the regulator will scale back its bond purchases by $15 billion per month.
Investors seems to be unwilling to buy EHT above the all-time high of $ 4,665. On the contrary, we believe that as long as EHT remains below the strong resistance of the 21 SMA (4,527), the crypto could continue oscillating and make a technical correction with the aim of accumulating more sellers. ETH could fall to the support of the uptrend channel around 4,120 or 5/8 murray at 4,062. This zone is a psychological level, giving us an opportunity to buy ETH again.
Our trading idea for the next few hours is to watch the key level of 4,527. Below this level, ETH is likely to continue its decline. So, we will have an opportunity to sell with targets at 4,375 and up to 4,125.
Conversely, if ETH makes a sharp breakout and confirms the bullish pennant pattern, it will be an opportunity to buy above 4,560 with targets up to 7/8 murray around 4,687 and up to the psychological level of $ 5,000.
Support and Resistance Levels for November 05 - 08, 2021
Resistance (3) 4,687
Resistance (2) 4,615
Resistance (1) 4,542
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Support (1) 4,418
Support (2) 4,375
Support (3) 4,316
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A trading tip for ETH for November 05 - 08, 2021
Sell below 4,527 (SMA 21) with take profit at 4,375 and 4,112 (bottom of uptrend channel), stop loss above 4,660.
The material has been provided by InstaForex Company - www.instaforex.com